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AMZA: The Surprising Verdict On The 20% Plus Yield

Published Wed, 07 Oct 2020 16:33:07 -0400 on Seeking Alpha

Seeking AlphaDividend Ideas | Basic MaterialsAMZA: The Surprising Verdict On The 20% Plus YieldOct. 7, 2020 4:33 PM ET|| About: InfraCap MLP ETF (AMZA), Includes: AMLP, EPD, ET, FEI, KYN, MPLX, NGL, NGL.PB, NGL.PC, NS, NS.PA, NS.PB, NS.PCby: Trapping ValueTrapping Value Conservative Income PortfolioThe best way to provide income in today's markets while reducing risksSummaryInfraCap MLP ETF has cut its distributions a few times.
The custom of overpaying distributions has hurt this fund from the beginning.
We examine the current distribution coverage and reach a surprising conclusion.
The sector appears cheap, but it might take a long time to bounce back.
The InfraCap MLP ETF (AMZA) has been sucked into the vortex of one of the worst performing sectors of the market. Energy has been a horrible place to invest in over the last 5-6 years and MLPs have been possibly the worst place within this sector. Of course, that is a great rear mirror look. What matters, though, is where we go from here.
The Fund
According to their website, the fund seeks to provide exposure to midstream master limited partnerships with an emphasis on high current income. Midstreams have been high yielding instruments and it was the right sector to get income when the fund launched. The fund also emphasized the right amount of income in the beginning. AMZA began by paying $2.08/share on the starting share price of $25.00. This was before reverse splits, though, and the numbers are not directly comparable to the current price. Over time, though, the distributions have continued to head generally in one direction. South.
Share Price And Distributions
Split adjusted, the fund started off at close to $240. That has now moved to $13.86.
Data by YCharts
The fund's distribution was also significantly higher, although AMZA started off by paying on a quarterly schedule, so that chart might make the drop seem more steep than it is.
Total return is the most... 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
FIRST TRUST MLP AND ENERGY INCOME FUND 11.38   36.7 0.31 0.00 10.50
KAYNE ANDERSON MLP INVESTMENT 14.71   0.0 0.00 0.00 9.76
MPLX LP 28.61   12.4 2.30 2.67 9.28
NUSTAR ENERGY 26.89   0.0 -6.61 2.40 8.95
ENTERPRISE PRODUCTS 28.68   12.4 2.31 1.76 6.13


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