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Time To Add This 9.3% Yielding CEF

Published Thu, 06 Sep 2018 08:45:00 -0400 on Seeking Alpha

The Nuveen Energy MLP Total Return (JMF) is a closed end fund compromised of a portfolio of Master Limited Partnerships (MLPs) in the midstream energy sector. The midstream sector, which is involved in transporting oil and gas, typically by pipeline, is showing increased growth due to resurgence of domestic oil and gas production. The US drilling rig count is up over 11% from (from 943 units to 1,048 units) in the past year, and technological improvement is driving significant reductions in well costs. I believe these trends will continue and the midstream sector has a bright future ahead of it. The chance to own a diverse basket of this sector at a 10% discount seems like the proverbial fat pitch to me.
Discount and Fees Last year, this fund traded at a 4% premium to its NAV, and traded at a small premium as recently as April. Since then, a 10% discount to its NAV has opened up. This is strange since the funds holdings have done well over this time period and is not a case of panic selling.

This fund carries a 1.60% management fee along with a leverage finance charge 0.92%. This management fee is high, but comparable to many funds in this sector, including the InfraCap MLP ETF (NYSEARCA: AMZA) which carries a gross management fee of 1.93% and does not trade at a discount.
JMF Holdings Taking a look at JMF's holdings, nearly all of them are growing and offer a stable or increasing distribution outlook. Here's the list
Company Ticker % of fund... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ENERGY TRANSFER PARTNERS 21.79   19.3 1.13 2.26 10.46
BUCKEYE PARTNERS LP 41.22   0.0 -0.63 3.00 7.29
ENERGY TRANSFER EQUITY 16.82   15.9 1.06 1.22 7.17
WILLIAMS 24.29   303.6 0.08 1.52 6.12


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