Quantcast

Why OPEC Lost The Oil War And How These 8 High-Quality, High-Yield MLPs Are Set To Profit Because Of It

Posted On May 28, 2017 11:26 pm
By:

How To Profit From The Rise Of The World’s New Oil Production King

So America is the world’s new swing producer, and rising oil production means that we are no longer at the mercy of a highly unstable region. But what does it mean for long-term income investors?

Well for one thing, the high-yield midstream MLP industry, which owns the majority of the gathering, processing, storage and transportation infrastructure needed by the US oil industry, is set to boom in the coming decade.┬áThese partnerships get the majority of their cash flow from long-term, fixed fee contracts and thus are far less commodity senstive than actual oil producers. That’s not to say that all MLPs are created equal, or that some of their cash flow isn’t sensitive to crude prices.

After all, Kinder Morgan (KMI), which helped to start the modern MLP age, famously took on way too much debt and was forced to slash its payout 75% back in December of 2015. However, while investors always need to be selective about what they invest in, there are plenty of great names in the industry with very secure cash flows, strong balance sheets, and excellent long-term payout growth prospects.

These include:

Enterprise Products Partners (EPD)
Magellan Midstream Partners (MMP)
Enbridge Inc (ENB)
Energy Transfer Equity (ETE)
MPLX (MPLX)
Phillips 66 Partners (PSXP)
Holly Energy Partners (HEP)
GasLog Partners (GLOP)

All of these MLPs are currently trading at attractive valuations and are poised to generate years of strong income growth, and market beating total returns over the coming decades.

Thus even though the stock market is at its third highest valuation in history, all these names are excellent places to invest new money today.

About author

Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I currently write for both Seeking Alpha, Simply Safe Dividends, and DividendSensei.com My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams, and enrich their lives. With 22 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams. I'm currently on an epic quest to build a broadly diversified, high-quality, high-yield dividend growth portfolio that: 1. Pays a 5% yield 2. Offers 7% annual dividend growth 3. Pays dividends AT LEAST on a weekly, but preferably, daily basis

Related Articles

Leave a reply

Your email address will not be published. Required fields are marked *