Displaying items by tag: mlps

(Houston)

It is a trying time to be picking where to allocate capital. Bonds are getting walloped and rate rises and trade war fears are weighing on stocks. Recession looms as a threat. With all that in mind, Goldman Sachs thinks it is a good time to buy MLPs. MLPs have been roughly flat this year, but GS thinks good times are ahead. Kinder Morgan is one of the bank’s top picks and they believe the sector will rise on improving cash flow and gains that result from simplifying their corporate structures (most will likely change to C-Corps following last year’s change in the tax code).

FINSUM: MLPs have been pretty flat and this is not the first time Wall Street analysts have called for a surge. Still, this is interesting to consider.

(Houston)

MLPs can perform well during periods of rising rates, such as in the last tightening cycle. While they are broadly more risky than bonds, they can provide good returns. Many MLPs collect inflation hedged payments, so they should perform better than bonds in a tightening environment. As an asset class, MLPs have been holding back on payouts, but these should accelerate in 2019 and 2020. Three names to look at are Enterprise Product Partners, yielding 6.1%, Magellan Midstream Partners, yielding 5.2%, and Antero Midstream Partners, yielding 4.8%.

FINSUM: Those yields look really juicy don’t they? And they are moderately inflation hedged, which is also quite promising. Worth a look.