Can You Bank on This 12% Yield?

If you want to make a lot of money over the next few years, then you need to pay attention to liquified natural gas (LNG). The U.S. shale revolution has unlocked vast swaths of natural gas. Yet overseas, limited supplies have resulted in shortages. This has created a “Made in America” export boom. In July, the country exported 6.0 billion cubic feet per day of LNG. The represents a sixfold increase from early 2017, and analysts believe this could just be the beginning.

Good news for GasLog Partners LP (NYSE:GLOP). The partnership owns a fleet of tankers that generate steady fees from shipping LNG. And with natural gas shipments surging, this has emerged as a lucrative business. Since 2014, the partnership’s distribution has more than doubled. (Source: “Distributions,” GasLog Partners LP, last accessed August 29, 2019.) And today, GasLog stock pays a yield of almost 12%. Bottom line: GasLog Partners LP has a high payout ratio and a moderately levered balance sheet. That means you can’t call this distribution the safest around. But with the partnership smack dab in the middle of America’s energy export boom, these payouts will likely keep rolling in for now.

Source: Income Investors

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