Second Article

Sustainable Distributions Spell Opportunity

By Elliott H. Gue

Wednesday, October 08, 2008

Like most stocks, publicly traded partnerships (PTP) have been hard hit in recent weeks. The industry benchmark Alerian MLP Index fell 17 percent in the third quarter, its worst quarterly showing ever.
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PTP Pointers

Tax Simplification

By Benjamin Shepherd

Wednesday, April 02, 2008

A publicly traded partnership (PTP) can be one of the best investments you can make from a tax standpoint, but putting your return together can be difficult because of the K-1 form, with which many investors are unfamiliar. more

Passing Through

Energy Shakeout

By Elliott H. Gue

Tuesday, July 29, 2008

Crude oil prices have fallen nearly $30 per barrel and natural gas prices are off $3.50 per million British thermal units (MMBtu) since the beginning of July. This sudden, dramatic correction has sent shockwaves through the energy patch and prompted some unusual volatility in our favorite energy-related publicly traded partnerships (PTPs). more

Feature Article

Cash or Credit

By Neil J. George

Wednesday, October 08, 2008

It comes down to whether partnerships will continue to generate more cash and keep their credit or not. Based on the numbers, they’re better equipped than most to sustain both.

There’s no sugarcoating it. Prices for all your partnership stocks are down, in some cases hard. It’s more important now than ever to know whether they’ll keep paying and how much. We need to justify your patience to buy and own.

To understand sustainability of the companies behind the partnerships, we’ve broken it down to questions of access to financing and stability of operations. Below we address credit market conditions and assess each of our recommendations’ ability to the crunch.

Elliott Gue focuses on the business side in Sustainable Distributions Spell Opportunity, evaluating how low oil and gas prices can go before petrol partners will be challenged. He details the important factors for the midstream segment--processors, transporters, pipelines--that leave it relatively immune to commodity-price fluctuations.

Pay Me

The No. 1 reason partnerships have always been attractive is that they’re structured to pay out the bulk of their profits in a tax-advantaged way. Despite the recent stock market pummeling, they continue to do just that.

The average dividend for publicly traded partnerships (PTP), according to the Alerian MLP Index, is now running near 14 percent, or about double where we were in the first half of 2008.

The chart below illustrates the five-year performance for the Alerian MLP Index on a total return basis, demonstrating the impact of dividend flows and accounting for the recent market selloff.

Over the past five years PTP investors have earned a total return of more than 45 percent, an average annual rate of close to 8 percent. The question now, however, isn’t how well they’ve done or how high current yields have jumped; we want to know whether the cash will keep flowing to you.