In an inflationary environment, what happens to these MLPs (master limited partnerships)? Obviously they rely heavily on borrowing and upon stock offerings for the purpose of raising money to make accretive acquisitions. It appears this would hinder their ability to continue to grow their dividends, in an environment where interest rates and thus dividend values are falling.
First of all, MLPs have basically broken any correlation with interest rates the past three years, and rather have been following economic growth like virtually every other equity. In other words, rising interest rates will not necessarily mean falling MLP equity prices. They certainly haven’t the last three months as Treasury yields have spiked and they’ve moved higher. Interestingly, the real doomsday scenario for MLPs is only possible after a prolonged period of not enough adversity. That’s a speculative building binge for new energy infrastructure (pipelines, etc.) that will be identifiable when MLP managements stop insisting on full to near-full contracting for any new projects.
Source: Investing Daily
Related Articles:
Master limited partnerships and inflation
Posted by D4L | Friday, January 07, 2011 | 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...
-
The most dependable dividend stocks typically have a long track record of sustaining payouts through different market cycles. Companies with...
-
Dividends can be a tremendously powerful part of your investing strategy. Not only can they give you a continuing source of cash to reinvest...
-
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.