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The Top MLP Winners of 2017

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Downstream MLPs

The top three MLP gainers in 2017 were downstream MLPs Calumet Specialty Products Partners (CLMT), Alon USA Partners (ALDW), and CVR Refining (CVRR). CLMT, ALDW, and CVRR had a strong 2017 with yearly gains of 92.5%, 78.0%, and 59.1%, respectively.

Their strong performance could be attributed to robust earnings growth, good volume growth, and expansion of refining margins. For more detailed analysis of CVRR’s 3Q17 earnings, please read CVR Refining Reported Strong 3Q17 Results, Stock Rose 11%.

Despite the huge gains in 2017, these three downstream MLPs are still trading significantly below the levels before the rout in energy prices.

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Viper Energy Partners

Viper Energy Partners (VNOM), a royalty and mineral interest owner MLP, was the fourth-highest MLP gainer in 2017. The partnership posted a yearly gain of 45.8% in 2017.

VNOM’s strong gains could be attributed to several rating upgrades and strong earnings growth. VNOM posted 109.3% YoY growth in adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] during 3Q17, driven by strong production growth and rising commodity prices.

Teekay LNG Partners

Teekay LNG Partners (TGP), which is one of the world’s largest owners and operators of LNG (liquefied natural gas) carriers, was the fifth-highest MLP gainer in 2017. TGP’s strong gains in 2017 could be attributed to the partnership’s strong expansion plans and its expected growth in the LNG carrier market, which was driven by a rise in LNG exports.

According to Mark Kremin, TGP’s CEO, “Looking ahead to 2018, we expect to take delivery of an additional eight LNG carrier newbuildings, all of which are scheduled to commence charter contracts ranging between six and 28 years in duration, which we expect will provide further cash flow and earnings growth to the Partnership.”

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Noble Midstream Partners

Noble Midstream Partners (NBLX), the midstream MLP formed by Noble Energy (NBL) to provide crude oil, natural gas, and water-gathering services, was the sixth-highest MLP gainer in 2017. NBLX’s gains in 2017 could be attributed to its strong earnings growth, throughput volumes growth, and industry-leading distribution growth.               

Other top MLP gainers

Southcross Energy Partners (SXE), Cheniere Energy Partners Holdings (CQH), GasLog Partners (GLOP), and Westlake Chemical Partners (WLKP) were among the top MLP gainers in 2017 with year-over-year gains of 25.2%, 23.8%, 20.4%, and 15.2%, respectively.

In the next article, we’ll look into 2017’s top MLP losers.

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