The first and foremost thing to remember when investing in a refinery MLP is that you're along for the ride. Everything is done for the primary benefit of the refinery operations, not the logistics partners. However, like any good parent, this company, has a lot at stake in seeing its child succeed, including a ~37% ownership, a 2% GP interest and IDRs. What was the point if it owns so much of the company? Firstly, this structure allows ii to still operationally control the assets compared to an outright sale. Second, it allows it to be used as a financing vehicle by the parent, converting undervalued/risky assets into high-value assets by adding greater security to cash flows via contracts. For this arrangement, it is compensated with IDRs (a performance-sharing fee much like a hedge fund charges). In other words, the growing, secure ~7% yield is not without a significant price.
Holly Energy Partners, L.P. (NYSE: HEP) is the logistics MLP spinoff of HollyFrontier Corp. (NYSE: HFC), an independent refiner with operations mostly in the Midwest and Rockies. You may not have heard about HEP, probably because it's a smaller MLP (about a $2B market cap) sponsored by a smaller refiner (although five refineries and a $5B market cap is nothing to sneer at). Since its IPO in 2004, it has increased its distribution every quarter - an impressive feat that puts it in the "Dividend Contender" club and should make heads turn twice.
Source: Seeking Alpha
Related Articles:
- 4 Secrets To Finding The Best Dividend Stocks
- What Determines A Dividend Stock's Yield
- 7 Dividend Stocks Yielding Over 3%, With Tiny Payout Ratios
- Warren Buffett's Secret To 50% Returns
- 7 Undervalued, Big-Name Stocks To Consider For Your Dividend Portfolio
7% Yield And 47 Quarters Of Distribution Growth
Posted by D4L | Friday, October 28, 2016 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
Dividend Growth Stocks News
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
We screened our 24/7 Wall St. dividend equity research database and found 5 stocks that combined can generate over $3,000 of annual passive ...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
Dividends can be a tremendously powerful part of your investing strategy. Not only can they give you a continuing source of cash to reinvest...
-
The most dependable dividend stocks typically have a long track record of sustaining payouts through different market cycles. Companies with...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
In this article, we discuss 5 best March dividend stocks to buy. If you want to read our detailed analysis of dividend capture strategy and ...
-
As the broader stock rally broadens to some of the more “boring” corners of the market, it’s the higher-yielding dividend plays that could s...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.