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High MLP/Midstream Yields But Ample Coverage, Payout Ratios

Published Wed, 02 Sep 2020 08:00:05 -0400 on Seeking Alpha

Seeking AlphaCommodities  | Market OutlookHigh MLP/Midstream Yields But Ample Coverage, Payout RatiosSep. 2, 2020 8:00 AM ET|| Includes: ALEFX, AMJ, AMLP, AMU, AMUB, AMZA, ATMP, BMLP, CBA, CEM, CEN, CNXM, CQP, CTR, DSE, EMLP, EMO, ENFR, FEI, FEN, FMO, FPL, GER, GMZ, ILPRX, IMLP, IPPLF, JMF, JMLP, KMF, KYN, MIE, MLPA, MLPB, MLPI, MLPO, MLPS, MLPX, MMP, NGL, NML, NTG, PAA, SMM, SRF, SRV, TTP, TYG, WESby: AlerianAlerian Master limited partnerships, oil & gas, energy, natural resourcesAlerian Insights.cls-1{fill:#024999;}SummaryDistribution coverage for MLPs remains elevated relative to history after 1Q20 distribution cuts, implying that MLPs are better able to afford their distributions today than in the past, yet yields remain elevated compared to history.
Payout ratios for 1H20 and 2Q20 are in line with 2018 and 2019 data, despite headwinds in 2Q20, highlighting midstream’s ability to afford dividend payments.
A few MLPs have begun to emphasize free cash flow after dividends in place of MLP-centric metrics like distribution coverage and distributable cash flow.

Despite the lingering uncertainty in energy markets, 2Q20 dividend payments were steady, with the vast majority of energy infrastructure names holding payouts flat and a few names even increasing dividends sequentially (read more). As of August 28, yields for the Alerian MLP Infrastructure Index (AMZI) and Alerian Midstream Energy Select Index (AMEI) sat at a lofty 12.5% and 8.0%, respectively, well above their five-year averages of 8.5% and 6.1%. With such elevated yields, distribution coverage and payout ratios are helpful for understanding midstream's ability to afford current payouts. Today's note examines how MLP distribution coverage and midstream dividend payout ratios have fared amid macro volatility and discusses the rising importance of free cash flow after dividends.
MLP distribution coverage remains elevated by historical standards. After COVID-19 began to disrupt oil markets in... 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
NGL ENERGY PARTNERS LP 12.93   5.0 2.57 1.56 12.04
NUVEEN ENERGY MLP TOTAL RETURN FUND 8.59   0.0 0.00 0.00 11.52
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
WESTERN GAS PARTNERS 24.62   15.5 1.59 2.47 9.98
KAYNE ANDERSON MLP INVESTMENT 14.71   0.0 0.00 0.00 9.76
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
PLAINS ALL AM. PIPELINE 21.20   5.3 3.99 1.44 6.75
MAGELLAN MIDSTREAM PARTNERS 65.61   11.0 5.99 4.05 6.20
CHENIERE ENERGY PARTNERS LP 44.55   0.0 0.00 2.44 5.48
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):
Midstream/MLP Earnings So Far: M&A, Dividends, Buyback And ESG
Framing Current Midstream/MLP Yields With Stress Tests
Examining Midstream C-Corp Dividends As Yields Rival Historical MLP Yields
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'

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