Cheniere Energy Partners’ yield
Cheniere Energy Partners (CQP), Cheniere Energy’s MLP subsidiary, is currently trading at a distribution yield of 5.6%, lower than its five-year average yield of 6%.
It’s also markedly lower than the Alerian MLP ETF’s (AMLP) yield of 8%.
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Cheniere Energy Partners has increased its distribution by 5.2% compounded annually in the last five years. CQP’s coverage ratio is ~1.5x, higher than the peer average.
In general, higher yields can signal higher risk, and investors expect superior returns for assuming such risk. Stock appreciation and higher distributions make MLPs attractive options from a total return perspective. As a result, investors looking for regular dividend income find this segment attractive.
To learn more about how energy midstream stocks have fared recently and where they might go from here, read Midstream Stocks Outperformed Broader Markets in Q1.