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Examining Midstream C-Corp Dividends As Yields Rival Historical MLP Yields

Published Thu, 23 Apr 2020 08:00:57 -0400 on Seeking Alpha

The recent sell-off and consequential increase in the yields of the broader midstream space has prompted many income-oriented investors to consider both energy infrastructure MLPs and their historically lower-yielding C-Corp counterparts.
With the steep sell-off in the space, the Alerian Midstream Energy Select Index's yield reached an all-time high of 15.2% on March 18 and sits at 9.6% as of April 21, even with announced dividend cuts included. This is well above the historical average yield for MLP-only indexes.
Similar to their MLP peers, several C-Corps have revised their dividend policies in the wake of lower oil prices.

Given their greater income, we have typically prioritized MLPs in our research covering yields and distributions (read more). However, the recent sell-off and consequential increase in the yields of the broader midstream space has prompted many income-oriented investors to consider both energy infrastructure MLPs and their historically lower-yielding C-Corp counterparts. The Alerian Midstream Energy Select Index (AMEI), which has a 75% weighting to US and Canadian midstream corporations and 25% weighting to midstream MLPs, has yielded 5.3% on average since inception in April 2013. For context, this compares to an average yield of 7.3% for the Alerian MLP Infrastructure Index (AMZI) over the same time period. With the steep sell-off in the space, AMEI's yield reached an all-time high of 15.2% on March 18 and sits at 9.6% as of April 21, even with announced dividend cuts included. This is well above the historical average yield for MLP-only indexes.
Similar to their MLP peers, several C-Corps have revised their dividend policies in the wake of lower oil prices. Through April 21, 13 out of the 51 total dividend-paying North American midstream companies have announced reduced payouts for 1Q20, including four C-Corps. The table below shows the four C-Corps that have announced dividend cuts, as well as the four corporations maintaining... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
FIDUCIARY/CLAYMORE MLP OPPORTUNITY FUND 8.91   0.0 0.00 0.00 14.36
TORTOISE MLP FUND 12.38   0.0 0.00 0.00 13.55
TORTOISE ENERGY INFRASTRUCTURE 20.77   0.0 0.00 2.62 12.48
BLUEKNIGHT ENERGY PARTNERS LP 1.19   0.0 0.00 0.16 12.12
NUVEEN ENERGY MLP TOTAL RETURN FUND 8.59   0.0 0.00 0.00 11.52
DELEK LOGISTICS PARTNERS LP 30.70   12.5 2.46 3.40 11.22
ENERGY INCOME AND GROWTH FUND 21.37   0.0 0.00 0.00 10.84
CUSHING MLP TOTAL RETURN FUND 10.20   18.6 0.55 0.00 10.84
FIRST TRUST MLP AND ENERGY INCOME FUND 11.38   36.7 0.31 0.00 10.50
CLEARBRIDGE ENERGY MLP OPPORTUNITY FUND 8.71   0.0 0.00 0.00 10.49
MACQUARIE INFRASTRUCTURE 39.63   34.2 1.16 4.00 10.04
KAYNE ANDERSON MLP INVESTMENT 14.71   0.0 0.00 0.00 9.76
TARGA RESOURCES 39.28   0.0 -1.32 3.64 9.30
SALIENT MIDSTREAM & MLP FUND 7.87   0.0 0.00 0.00 8.60
KAYNE ANDERSON MIDSTREAM/ENERGY FUND 10.86   0.0 0.00 0.00 8.23
TC PIPELINES LP 38.43   0.0 -2.98 2.60 6.79
CRESTWOOD EQUITY PARTNERS 36.99   13.5 2.74 2.40 6.47
ENTERPRISE PRODUCTS 28.68   12.4 2.31 1.76 6.13
PEMBINA PIPELINE 36.91   16.1 2.29 1.80 4.86
ONEOK 73.93   24.6 3.01 3.56 4.84
KEYCORP 18.03   10.7 1.68 0.74 4.08
JPMORGAN ALERIAN MLP INDEX ETN  

FIDUCIARY/CLAYMORE MLP OPPORTUNITY FUND - FMO
FIDUCIARY/CLAYMORE MLP OPPORTUNITY FUND - FMO  


Older articles featuring Fiduciary/claymore Mlp Opportunity Fund (FMO):
2020 Vision: What's The Outlook For Midstream/MLP Dividends This Year?
Income Investing And The Changing Yield Curve
The Highest Yield Left In The Market
Closed-End Funds: 12 Funds In The 10%+ Yield Club At A Discount
Do Dividend-Paying Stocks Make Better Investments?
Closed-End Funds: 12 Funds In The 10%+ Yield Club At A Discount
You Were Warned: MLPs And 'I Bought It For The Dividend'
High Yield For Granny: The Savvy 'Widow & Orphans' Income Factory
High-Yielding And Well-Valued MLP Closed-End Funds, Part 2
High-Yielding And Well-Valued MLP Closed-End Funds, Part 1

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