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Behind ETP’s, EEP’s, BPL’s, and SUN’s High Yields


Nov. 20 2020, Updated 1:51 p.m. ET

ETP’s yield

After a 6.3% fall on March 15, 2018, Energy Transfer Partners (ETP) is trading at a distribution yield of ~13.6%. ETP’s current yield is high despite an effective distribution cut following its merger with Sunoco Logistics. It paid a flat distribution of ~$0.57 in 4Q17. According to the company, it temporarily suspended distribution growth in 4Q17 to lessen the need for equity funding. It will evaluate possible distribution increases in the future. ETP’s coverage ratio in 4Q17 was 1.3x.

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EEP’s yield

Enbridge Energy Partners (EEP) is currently trading at a yield of 12.9%. The company announced a 40% distribution cut in April 2017. Enbridge Energy Partners paid a distribution of $0.35 per share in 4Q17, unchanged from the previous quarter. Enbridge Energy Partners’ coverage ratios in 4Q17 and 2017 were 1.3x and 1.2x, respectively.

BPL’s yield

Buckeye Partners (BPL) is currently trading at a yield of 12.0%. Buckeye Partners’ 4Q17 distribution remained flat at ~$1.26 per share. Its coverage ratio for the quarter was 1.0x. Buckeye Partners doesn’t intend to cut distributions in the near future. For more on the MLP, read Can Buckeye Partners Sustain Its Yield above 11%?

SUN’s yield

Sunoco (SUN) is trading at a high distribution yield of ~12.1%. It paid a distribution of ~$0.83 per share in 4Q17, unchanged from the previous quarter. It hasn’t increased its distribution for six quarters. Sunoco’s distribution coverage ratios for 4Q17 and 2017 were 1.0x and 1.2x, respectively. In the next part, we’ll compare these high-yield MLPs’ leverage.


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