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re: A List of (Potentially) Good MLPs to Invest In

Posted on 4/18/16 at 1:27 pm to
Posted by Omada
Member since Jun 2015
695 posts
Posted on 4/18/16 at 1:27 pm to
The List of 7-9's:
CNNX (8)- a midstream MLP formed between CONSOL Energy and Noble Energy for their Marcellus shale operations in Pennsylvania and West Virginia. The only F-Score criteria it failed was for a lower Long Term Debt to Total Assets Ratio; however, since long term debt is only 8% of assets, this company is essentially a 9. And since there is so little debt, there is obviously a lot of equity, which is good for shareholders. I would like to see a little higher current ratio, though. The only obvious issue is the MLP's ties to CONSOL and Noble; should they face trouble, so will CNNX.
CINR (8)- owns a controlling interest in a trona ore and soda ash miner in Wyoming. The current ratio has fallen since last year, so that is the only F-Score criteria it fails. However, the current ratio is still over 3, so this company should really be considered a 9 as well. The dividend has been slowly increasing. The only obvious issue I see is that they have only 1 main customer.
SGU (7)- a distributor and seller of propane and heating oil in the Northeast and Mid-Atlantic regions of the US. The F-Score criteria it fails are higher Asset Turnover and Current Ratios over the prior year; however, the current ratio is still over 1, and the asset turnover ratio is a good 2.4, so SGU is basically an 8. The dividend yield is lower than the previous two, but the stock price alone has outperformed the S&P on a 1 year and 10 year basis and matched the S&P on a 5 year basis.

The Maybe's:
WLKP (4)- an ethylene producer with 2 facilities in Lake Charles, LA and one in Calvert City, KY. It fails 5 criteria (current ratio, asset turnover, ROA, gross margin, LT Debt to Asset ratio), but the current ratio is still high and asset turnover, ROA, and gross margins are still good. The stock price has been declining since the IPO, though. WLKP could use further research.
NTI (5)- a variable distribution MLP, NTI is a refiner and retail gasoline seller in the Midwest (the PADD II region). It has a refinery in Minnesota and 165 SuperAmerica brand convenience stores in South Dakota, Minnesota, and Wisconsin. It fails 4 criteria (current ratio, LT Debt to Assets ratio, asset turnover, dilution). However, the current ratio is still good at 1.4, the increase in Long Term Debt relative to Total Assets was minor, asset turnover is still good at 2.93, and the dilution was minor. this doesn't seem like a bad MLP at a glance.
TNH (4)- a nitrogen fertilizer producer and another variable distribution MLP. TNH also fails 5 criteria (current ratio, LT Debt to Assets ratio, gross margins, ROA, and asset turnover). However, the company has a current ratio of 2.9 and very little debt (current assets could pay off all liabilities two times over easily), gross margins saw only a slight decline, and ROA and asset turnover are still strong. Sales declined a fair bit last year due to work on their sole facility, which reduced production. Not a bad looking MLP that deserves more research.
Posted by Omada
Member since Jun 2015
695 posts
Posted on 4/18/16 at 1:29 pm to
The Leftovers:
EQM (6)- midstream company in the Appalachian Basin. The dividend has been increasing
GEL (5)- midstream company for the Gulf of Mexico. The dividend has been increasing, but net income last year exceeded net operating cash flows, which isn’t good.
MMP (6)- transports and stores oil and refined products. Increasing dividend.
PBFX (6)- storage for oil and refined products. The dividend has been increasing, but the company has negative equity (debt exceeds assets).
SEP (5)- transports and stores NGLs and natural gas. The dividend has been increasing, but it has low liquidity.
SRLP (5)- stores and sells natural gas and other materials. The dividend has been increasing, but the company has quite a bit of debt.
GMLP- 2015 20-F (the full 2015 financial results) has not been released yet; owns and operates FSRU vessels for LNG.
SDLP- 2015 20-F has not been released yet; Seadril’s MLP that acquires and operates offshore drilling rigs; rigs are under long-term contract with Chevron, BP, ExxonMobil, and Tullow.
TGP- 2015 20-F has not been released yet; international LNG sea transportation service.

Of these, EQM, MMP, and PBFX deserve a closer look, which I failed to do. GEL was the MLP I was originally going to research, but I don't think that will happen now. Hopefully these lists are useful to everyone.
Posted by TopWaterTiger
Lake Charles, LA
Member since May 2006
10237 posts
Posted on 4/19/16 at 10:23 am to
just out of curiosity....where did MMLP fall in your list? I used to work for them so I have some company stock.
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