Which MLPs Offer the Highest Yields?

MLPs trading at high yields

In this part, we’ll discuss the MLPs that are trading at a yield higher than 10%. The MLPs included in the discussion are oil and gas MLPs. Shipping and coal MLPs aren’t included. Only MLPs with a market capitalization of more than $500 million are considered. Enbridge Energy Management (EEQ) and Enbridge Energy Partners (EEP) aren’t included pending their proposed merger with Enbridge (ENB).

Which MLPs Offer the Highest Yields?

The above graph shows the MLPs trading at yields above 10%—higher than Alerian MLP Index’s yield of ~7.7%. Hi-Crush Partners (HCLP), Buckeye Partners (BPL), Summit Midstream Partners (SMLP), Sunoco (SUN), and USA Compression Partners (USAC) are trading at yields higher than 12%.

Hi-Crush Partners

Hi-Crush Partners more than tripled its quarterly distribution in the second quarter. In addition to significant cash-flow growth, the step was aimed at the possible conversion to a C corporation in the future. “Our partnership agreement includes an IDR reset provision, which requires four consecutive quarters of distributions above $0.7125 per unit, and provides one path of many to a potential conversion to a C-Corporation,” said Laura C. Fulton, Hi-Crush Partners’ CFO.

Buckeye Partners

Buckeye Partners’ distribution coverage is below 1.0x, which raises concerns about the sustainability of its distributions. Read Buckeye Partners Kept Distribution Unchanged in Q2—What’s Next? to learn more.

In the next two parts, we’ll discuss analysts’ recommendations for these high-yielding MLPs.