Alerian MLP ETF

Sunoco Logistics has the lowest profit margin and ROE among its peers. Its profit margin and ROE of 1.6% and 1.7%, respectively, are well below the group average.

There are four methods of investing in MLPs. The MLP funds’ market cap reached $54 billion as of April 30, 2014. The number of MLP-focused funds reached 49.

The Permian Basin is one of the US’s primary drivers of oil production growth. Market Realist provides an overview of this prolific hydrocarbon asset with a primer piece: “Introduction to the Permian Basin”.

Spectra Energy Corp. (SE), headquartered in Houston, Texas, owns and operates a large and diversified portfolio of natural gas–related assets in North America.

ONEOK Partners (OKS) is a master limited partnership (or MLP) engaged in gathering, processing, storing, and transporting natural gas and natural gas liquids (or NGLs) in the U.S.

ETFs (exchange-traded funds) have stock-like characteristics, while ETNs (exchange-traded notes) possess bond-like traits.

Chesapeake Energy (CHK) opened 50% lower in yesterday’s early trading on the rumor that the company is working with advisors to pursue bankruptcy.

Most MLPs operate in the midstream energy industry. They’re mainly involved in gathering, processing, storing, and transporting energy commodities.

The Global X MLP & Infrastructure ETF (MLPX) tracks the Solactive MLP & Energy Infrastructure Index. The index consists of midstream energy infrastructure MLPs and corporations.

Hurricane Harvey hit the US Gulf Coast last week. The US Gulf Coast is a major destination for US refineries and energy infrastructure.

About 57% of analysts rate Energy Transfer Partners as “buy,” and ~43% rate it as “hold.”

In this series, we’ll do a comparative analysis of four MLPs that provide crude oil and refined products transportation and terminaling services.

Boardwalk Pipeline Partners has risen 30.3% since the beginning of 2016. At the same time, the Alerian MLP ETF has risen 4.0%.

Generally, MLP yields move in the same direction as Treasury yields in the long term. MLP yields trade at a spread over Treasuries.

US crude oil February futures rose 5.6% in the trailing week.

In the seven calendar days to February 8, 2018, OIH, XOP, XLE, and AMLP fell 13.6%, 12.7%, 11.8%, and 8.2%, respectively.

On May 9, 2017, June 2017 crude oil futures were trading at a discount of $2.4 to June 2018 futures contracts—the highest discount since March 22, 2017.

The Alerian MLP ETF (AMLP) was trading at a yield of 8.9% at the end of the week ending July 1, 2016.

The Vanguard Group was the top institutional investor in midstream C corporation Kinder Morgan (KMI) during the fourth quarter.

NuStar Energy (NS) has gained 25.9% YTD (year-to-date) despite touching multiyear lows in the beginning of 2016.

Significantly higher rates of propane exports have helped to boost propane prices—and the margins of some MLP names.

The Alerian MLP ETF was trading at a yield of 11.4% at the end of the week ending March 25, 2016. The yield rose from 10.7% at the end of the previous week.

Energy Transfer Partners’ enterprise value more than quadrupled between 2007 and 3Q14.

Rice Midstream Partners, Rice Energy’s natural gas and water service, has gained 45.6% YTD, despite touching multiyear lows early in 2016.

Cheniere Energy (LNG) had a weak month in July. It fell a huge 7.2%, and the weakness continues in August.

MLP sluggishness continued last week. The Alerian MLP Index, which tracks the performance of 50 energy infrastructure MLPs, ended the week 4.4% lower.

Plains All American Pipeline has revised its mid-point EBITDA guidance for full year 2015 to $2.2 billion, 3% below the $2.3 billion guidance it had previously provided.

About 64% of the analysts surveyed have rated Dominion Midstream Partners (DM) a “buy,” 27% have rated it a “hold,” and 9% of the surveyed analysts have rated DM a “sell.”

The Liquids Transportation and Storage segment was Energy Transfer Partners’ best performing segment in the last quarter.

Buckeye Partners L.P. (BPL) is a master limited partnership operating in the midstream oil and gas industry in the United States.

Energy Transfer (ET) stock continues to trade weak. The stock hit a new 52-week low of $12.75 on December 18.

Kinder Morgan operates like a toll road or fee-based business with limited commodity price exposure. About 85% of KMI’s 2015 budgeted EBDA is fee-based, and 94% is fee-based or hedged.

The operating margin of EPD’s crude oil pipeline segment has been increasing since 2010 due to increases in volume, average tariffs, and other fees.

In the trailing week, OIH rose 0.5%—the only energy ETF on our list that closed in the green. US crude oil futures rose 2.6%.

Sunoco Logistics (SXL) will share the proportionate capital expenditure in the Bakken Pipeline project. This led SXL to revise its capital expenditure for 2015.

Master limited partnerships rely highly on external capital to fund growth Master limited partnerships or MLPs are specially structured entities that must pay out most of the cash they generate to unitholders. So MLPs rely especially on external funding sources (as opposed to internally generated cash) to execute growth projects and acquisitions. Because of this […]

So far, Enterprise Products Partners (EPD) stock has risen ~1% in 2018. The stock has outperformed the Alerian MLP ETF (AMLP).

Targa Resources Partners (NGLS) was the top loser among midstream MLPs at the end of trading on Thursday, July 30. It fell 4.13% yesterday.

Buckeye Partners’ public offering Buckeye Partners (BPL) plans to finance its VTTI deal with an equity offering. In a press release published on October 24, the partnership announced a public offering of 7.8 million common units. The offering units are priced at $66.05 per unit. BPL’s share closed at $70.60 on the day of the […]

Oil production in the US has increased drastically due to new technologies and the application of hydraulic fracturing and horizontal drilling.

Currently, MarkWest Energy and MPLX trade at distribution yields of 5.33% and 2.95%, respectively—compared to pre-merger announcement yields.

ETP’s interest in Sunoco Logistics (SXL) gives ETE acccess to SXL’s geographically diverse portfolio of complementary pipeline, terminalling, and acquisition and marketing assets.

Last week, the S&P Mid-Cap 400 (IVOO), the S&P 500 (SPY), and the Dow Jones Industrial Average (DIA) fell 5.2%, 4.6%, and 4.5%, respectively.

MLPs saw a huge decline in prices during the first week of May driven by the sharp decline in crude oil prices.

Distribution growth is the cornerstone of MLP investing because it provides a hedge against inflation. Its preserves the investment’s purchasing power.

Among the top energy ETFs, the Energy Select Sector SPDR ETF (XLE) had the highest correlation of 70.4% with US crude oil in the trailing month to June 9, 2016.

In its “Weekly Petroleum Status Report” released on October 21, the EIA stated that residential propane prices averaged just under ~$1.90 per gallon.

Atlas Pipeline Partners (APL) released its financial information for 1Q14 on May 5, 2014.

On February 10, 2014, Boardwalk Pipeline Partners (BWP) announced 4Q13 and FY2013 results. The company reported 4Q13 adjusted EBITDA of $129.6 million.

Enterprise Products trades at a distribution yield of ~4.9%. One of the reasons for EPD’s relatively lower distribution yield might be its distribution coverage ratio.

Energy Transfer looks relatively expensive compared to its peers. Energy Transfer is trading at a forward EV-to-EBITDA multiple close to 11x.

Among the energy ETFs, the Energy Select Sector SPDR ETF (XLE) had the highest correlation with US oil (UCO) (USO) prices at 78.7% between May 11 and May 18, 2017.

Although pipelines are the cost-effective way to transport crude oil, they require huge initial investment and are often impeded by regulations from the government agencies.

Considering its high leverage and unhedged volumes, Vanguard Natural Resources’ short-term outlook seems bleak.

Chesapeake also is seeking strategic alternatives for its oilfield services business. The announcement of these divestitures is likely positive for Chesapeake in the long term.

Spectra Energy’s Western Canada segment saw volume increase ~20% in 2014 over the previous year. In 4Q14, volume increased 14% over 3Q14.

Genesis Energy L.P. (GEL) is a master limited partnership (or MLP) that operates in the midstream segment of the oil and gas industry in the Gulf Coast region of the United States.

US crude oil rose 3.2% last week and ended the week at a 28-month high of $55.6 per barrel. However, MLPs didn’t participate in crude oil’s rally.

In 2013, the company processed an average of 780.1 million cubic feet per day of natural gas and produced an average of 91.9 thousand barrels per day of NGLs.

Cushing, Oklahoma, is the delivery point for NYMEX crude futures contracts. It’s where a lot of supply sources of crude meet a lot of demand sources for that crude.

After sailing through rough seas for the past few years, Energy Transfer Equity (ETE) seems to have attractive prospects going forward.

The one-year correlation coefficient between Energy Transfer Equity and crude oil was 0.49 as of July 11.

As new pipelines helped drain crude from Cushing inventories—mostly in the latter part of 2014—new pipelines also brought more crude to replenish them.

US residential propane demand is 1.5 MMbpd for the week ended December 4. This was 0.24 MMbpd more than the demand in the week ended November 27.

Of the analysts surveyed by Bloomberg, 80% rated Tesoro Logistics as a “buy,” and 20% rated it as a “hold.” No analysts rated it as a “sell.”

Increase in crude inventories is likely the result of declining refinery input demand—which decreased by 525,000 bpd—as refineries enter seasonal maintenance to prepare for the upcoming winter.

Sunoco Logistics Partners L.P. (SXL) is a master limited partnership (or MLP). Its Crude Oil Pipelines segment transport 4,900 miles of crude oil, primarily in Oklahoma and Texas.

Williams Companies’ implied volatility Williams Companies’ (WMB) 30-day implied volatility was 22.8% as of June 14, 2017. Peers Energy Transfer Equity (ETE), ONEOK (OKE), and Kinder Morgan (KMI) had implied volatility of 32.5%, 22.6%, and 20.1%, respectively, as of June 14. In comparison, the Alerian MLP ETF (AMLP) has implied volatility of 17.5%. Williams Companies’ […]

Yields for MLPs have come down in recent quarters, driven by the slight recovery of investor confidence in the energy sector.

Traditionally, the Merchant Services segment provides wholesale distributor service of refined petroleum products in the U.S. and the Caribbean.

Carl Icahn’s Icahn Associates continues to be the biggest institutional shareholder of the energy company even after offloading a big chunk in the second quarter.

Sunoco Logistics Partners, L.P. (SXL) released its financial information for 1Q14 on May 6, 2014.

Dominion Midstream Partners (DM) was the top loser among midstream MLPs at the end of trading on Friday, July 24. It fell 3.05%.

Propane names such as AmeriGas and Suburban Propane could be helped by this week’s winter storms.

Cheniere Energy (LNG) has been rallying since its 1Q18 earnings announcement on May 4. The US LNG exporter is up over 5% since then.

On April 5, 2017, active natural gas (UNG) (FCG) (BOIL) (GASL) futures were trading at a premium of $0.33 to futures contracts 12 months forward.

Pioneer kicked off full development in the Eagle Ford after signing a joint venture agreement with Reliance Industries (RIL) in June, 2010.

ONEOK (OKE) has seen a strong rally from its 2016 lows resulting in strong returns over the past seven years.

Onshore Natural Gas Pipelines & Services’ operating profit declined to $195.4 million in 3Q14—compared to $213.4 million recorded last year.

On April 11, 2017, May 2017 crude oil (DBO) (OIIL) (USL) futures were trading at a discount of $1.15 to May 2018 futures contracts.

Last week, frac spreads traded up slightly, and over the medium term, frac spreads are up significantly. This is a positive catalyst for natural gas processors.

On October 3, 2017, US crude oil (USL) (OIIL) November 2018 futures settled $0.33 higher than the November 2017 futures.

Between December 29, 2017, and January 8, 2018, the premium and the oil prices rose. The market expects a tightening supply-demand balance for oil in 2018.

Energy Transfer (ET) released its fourth-quarter and full-year 2018 earnings yesterday.

On August 4, 2016, US crude oil (USO) (OIIL) active futures contracts closed at $41.93. They rose by 2.7% on August 4 compared to the previous trading session.

On December 5, 2017, the January 2018 futures contract for US crude oil settled at a premium of $2.5 to January 2019 futures.

On June 29, crude oil futures fell more than $1 per barrel due to fears of a Greek default. The United States Oil Fund (USO) fell 2.4% yesterday.

What risk should you know about that could significantly affect MLP valuation? Read on to find out.

On January 2, 2018, natural gas (UNG) (BOIL) (FCG) February 2018 futures settled $0.025 less than February 2019 futures.

On February 9, 2017, US crude oil futures contracts for March delivery closed at $53.00 per barrel—an ~1.3% rise compared to the previous trading session.

Williams Companies Inc. (WMB) engages in the energy transport and processing infrastructure business. WMB’s assets are mainly located in the U.S. However, it has operations in Canada.

Delek Logistics (DKL) was the best performer among midstream MLPs at the end of trading on Wednesday, July 8. It rose 0.11% yesterday.

ONEOK Partners’ (OKS) natural gas pipelines segment owns and operates regulated interstate and intrastate natural gas pipelines and natural gas storage facilities.

On March 1, 2017, active natural gas (UNG) (FCG) (BOIL) (GASL) futures were trading at a discount of $0.5 to futures contracts 12 months ahead.

The company provides natural gas gathering and processing services in the Eagle Ford Shale play in Texas, as well as in the Anadarko, Arkoma, and Permian basins.

In recent years, non-traditional master limited partnerships have become more common. Read on for how this could affect MLPs as an asset class and investors.

So far in 2018, Plains All American Pipeline (PAA) stock has risen nearly 10% and outperformed its peers.

EQM Midstream Partners (EQM) reported adjusted EBITDA of $280.1 million in the third quarter, an increase of 65% year-over-year.

Of the top 15 MLPs by market cap, 13 reported YoY (year-over-year) rises in their quarterly revenues and earnings.

William Companies (WMB) has recovered slightly after a weak August 2017, and it has risen 2.4% since last week. WMB has fallen 3.3% since the beginning of 2017.