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Are Top Yields In Energy Preferred Stocks Too High?

Published Mon, 13 May 2019 12:03:31 -0400 on Seeking Alpha

The U.S. energy industry has been on fire since fracturing entered the picture, the economy is booming and President Trump has reduced regulations and restrictions on the industry to encourage energy independence. The industry has responded from all positive events by becoming a real powerhouse in the world and are transforming our country from being a net importer of oil and gas to being one of the largest exporters in the world. I have read stories that suggest that we will become the largest exporter of oil in the next few years, surpassing Saudi Arabia and Russia.
For a variety of reasons, oil prices have increased to levels that support growth in the industry. Higher prices result in higher revenue and profits for oil and gas companies. The dark cloud from several terrible years appear to be lifting and forecasts for better times are upon us.
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As good as the economy is and with the oil and gas markets improving, yields on energy related preferreds are among the highest available in the marketplace. Checking the database at “I Prefer Income”, I found 286 cumulative preferred stocks with an average yield of 7.1%. These 11 preferreds have an average yield of 8.6%. That means these preferreds are 21.1% higher than the overall cumulative preferred average. High yields logically mean that risks are also high. Are these high risks warranted? Are the yields too high?
Introducing the highest yielding energy related preferred stocks in the marketplace
To... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
NGL ENERGY PARTNERS LP 12.93   5.0 2.57 1.56 12.04
GLOBAL PARTNERS 19.17   12.4 1.54 2.06 10.73
NUSTAR ENERGY 26.89   0.0 -6.61 2.40 8.95
DCP MIDSTREAM LP 36.33   51.2 0.71 3.12 8.59


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