Monday, August 1, 2011

Master Limited Partnerships for Yield and Growth

Master limited partnerships dominated the list of consistent weekly dividend increases for a second consecutive week. Master limited partnerships are pass-through entities, which are mostly engaged in transportation, storage and distribution of oil and gas. MLPs are monopolies, which typically enjoy toll-booth type business models. MLP investors are called limited partners, and the shares are called units. MLPs are not taxed at the entity level, but at the individual unitholder level. The K-1 tax package details each individual partner’s share of the partnership’s income and expenditures from various sources. In addition, unitholders need to understand the difference between general and limited partners as well as tax implications for holding MLPs in tax deferred accounts.

Last week I mentioned that MLPs seems like the perfect dividend growth stocks, given their high yields and distribution growth. They do have some risks however, including interest rate, regulatory and business risks.

The master limited partnerships which raised distributions over the past week include:

Sunoco Logistics Partners L.P. (SXL) engages in the transport, terminalling, and storage of refined products and crude oil, as well as the purchase and sale of crude oil in the United States. This master limited partnership increased quarterly distributions to $1.215/unit. Sunoco Logistics Partners is a dividend achiever has increased distributions for ten years in a row. Yield: 5.70%

Enbridge Energy Partners, L.P. (EEP) owns and operates crude oil and liquid petroleum transportation and storage assets, as well as natural gas gathering, treating, processing, transmission, and marketing assets in the United States. This master limited partnership increased quarterly distributions to 53.25 cents/unit. Enbridge Energy Partners has increased distributions for five consecutive years. Yield: 7.30%

Exterran Partners, L.P. (EXLP) provides natural gas contract operations services to customers in the United States. This master limited partnership increased quarterly distributions to 48.25 cents/unit. Exterran Partners has increased distributions for five years in a row. Yield: 8.10%

Holly Energy Partners, L.P. (HEP) operates a system of petroleum product and crude oil pipelines, storage tanks, distribution terminals, and loading rack facilities. This master limited partnership increased quarterly distributions to 86.50 cents/unit. Holly Energy Partners has increased distributions for seven years in a row. Yield: 6.50%

NuStar GP Holdings, LLC (NSH) owns general partner and limited partner interests in NuStar Energy L.P. that engages in the terminalling and storage of petroleum products, transportation of petroleum products and anhydrous ammonia, and marketing of asphalt and fuels. This master limited partnership increased quarterly distributions to 49.50 cents/unit. NuStar GP Holdings has increased distributions for five years in a row. Yield: 5.40%

DCP Midstream Partners, LP (DPM), together with its subsidiaries, engages in gathering, compressing, treating, processing, transporting, storing, and selling natural gas in the United States. This master limited partnership increased quarterly distributions to 63.25 cents/unit. DCP Midstream Partners has increased distributions for six years in a row. Yield: 6.30%

Williams Partners L.P. (WPZ) focuses on natural gas transportation, gathering, treating and processing, storage, natural gas liquid fractionation, and oil transportation activities in the United States. This master limited partnership increased quarterly distributions to 73.25 cents/unit. Williams Partners has increased distributions for seven years in a row. Yield: 5.70%

Alliance Resource Partners, L.P. (ARLP) engages in the production and marketing of coal for utilities and industrial users in the United States. Alliance Holdings GP, L.P. (AHGP) is the general partner for ARLP. Alliance Resource Partners (ARLP) raised its quarterly distributions to 58.25 cents/unit. Alliance Holdings GP (AHGP) raised its quarterly distributions to 58.25 cents/unit as well. ARLP has raised distributions for 9 years in a row and yields 3.00%. AHGP has raised distributions for 6 years in a row and yields 4.70%.

The corporations which announced dividend increases over the past week include:
Republic Services, Inc. (RSG) provides nonhazardous solid waste collection, transfer, and disposal services in the United States. The company increased its quarterly dividend by 10% to 22 cents/share. Republic Services has increased its quarterly dividend for nine consecutive years. Yield: 3%

Community Bank System, Inc. (CBU) operates as the holding company for Community Bank, N.A. that provides various banking and financial services to the retail, commercial, and municipal customers. It offers loans and accepts deposits. The company increased its quarterly dividend by 8.30% to 26 cents/share. Community Bank System is a dividend achiever which has increased its quarterly dividend for 17 consecutive years. Yield: 4.20%

Community Trust Bancorp, Inc. (CTBI) operates as the holding company for Community Trust Bank, Inc. that provides various banking products and services. The company increased its quarterly dividend by 1.60% to 31 cents/share. Community Bank System is a dividend champion which has increased its quarterly dividend for 31 consecutive years. Yield: 4.50%

Kellogg Company (K), together with its subsidiaries, engages in the manufacture and marketing of ready-to-eat cereal and convenience foods. The company increased its quarterly dividend by 6.20% to 43 cents/share. Kellogg has increased its quarterly dividend for 8 consecutive years. Yield: 3.10%

Crane Co. (CR) manufactures engineered industrial products in the United States and internationally. The company increased its quarterly dividend by 13% to 26 cents/share. Crane Co. has increased its quarterly dividend for 8 consecutive years. Yield: 2.20%

International Flavors & Fragrances Inc. (IFF) , together with its subsidiaries, creates, manufactures, and sells flavor and fragrance products in the United States and internationally. The company increased its quarterly dividend by 14.80% to 31 cents/share. International Flavors & Fragrances has increased its quarterly dividend for 9 consecutive years. Yield: 2.00%

Norfolk Southern Corporation (NSC), through its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods primarily in the United States. The company increased its quarterly dividend by 7.50% to 43 cents/share. Norfolk Southern Corporation has increased its quarterly dividend for 10 consecutive years. Yield: 2.30%

Full Disclosure: Long EEQ and K


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This article was included in Carnival of Personal Finance # 321

2 comments:

  1. Very Useful information , this is both good reading for, have quite a few good key points, and I learn some new stuff from it too, thanks for sharing your information

    ReplyDelete
  2. Very good points you wrote here..Great stuff...I think you've made some truly interesting points.Keep up the good work.

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