Hi I'm Jimmy in this video
we're looking at the top three
dividend paying MLP its
MLP is short for master limited
partnership.
So these three different paying
stocks have strong coverage ratios
and plenty of free cash flow coming
in to continue to pay their
dividends in the future.
And then at the end of the video I
actually got two bonus MLP
dividend paying stocks that
are quite good.
I expect their dividends to be
fairly consistent.
They just weren't quite solid enough
to make the top three list.
Now I plan on doing a series of
videos just like this where I try to
find the top dividend paying stocks
for each sector although
MLPs aren't technically their own
sector they tend to be very
good dividend payers.
So I thought it made sense to start
with these. This whole group.
So if you have a preference for
for which sector we might do next
please let me know in the comments
below. And if you're curious to
learn more about MLPs please.
Again in the comments because I've
put together a few primers on
closed end funds or REITs I've
been considering doing an MLP primer
if that's something you'd be
interested in knowing about.
Let me know.
Basically what we need to know for
this video is master limited
partnerships tend to focus on the
oil and gas market.
They're usually involved in the
shipping and delivery of both oil
and gas and generally they have
great dividends because
they don't have to pay corporate
income tax as long as they pass
through their profits to the
shareholders.
Okay let's kick off our top three
MLP list with the smallest
company on our list and that's
Magellan Midstream Partners
ticker symbol MMP.
So MMP has a dividend yield
of about 6 percent with
the current price of about sixty six
dollars per share and they have a
dividend of almost four dollars.
When we look at their dividends over
the past four quarters this
is a chart of Magellan dividend
history and as we could see
they have steadily increased their
dividend every year an
analyst estimates those that are
running the green bars while they're
ex that they're expecting for these
dividends to continue an increase in
the coming years.
Okay. So what does Magellan do.
Well they own a lot of pipelines
and they're in the early stages of
building another pipeline down in
Texas and they
expect for this to be a good cash
flow generator for them over the
long run.
Now one of the reasons I picked
each of these three MLPs on our list
is that they have fairly low
exposure to oil and gas prices.
Instead the majority of their
revenue is generated from fees
for shipping.
Not all of it but compared to the
rest of the industry.
Most of it is now Magellan
is well positioned to bring in
good amounts of cash flow with
their current pipelines and
this should ultimately lead to them
being able to continue to increase
their dividends at the end of the
day free cash flow for these
companies are the most important
things. And since they're getting
paid to ship it in a very
active market down near Texas.
Well I would expect for their
profits to stay fairly consistent.
Okay. Onto our next dividend paying
stock. This is enterprise product
partners ticker symbol EPD.
So EPD is one of
the largest MLPs out there
and I like them.
They're one of my favorite a
mouthpiece because they control a
ton of key assets so
their assets what they control
are crucial for their customers
businesses.
This allows for them to consistently
bring in free cash flow
and ultimately support their
impressive dividend yield.
This their dividend history and
based on their dividends over the
past 12 months which totaled to be
about a dollar seventy five in their
current price which is about twenty
eight dollars and fifty cents.
Well once again their dividend yield
ends up being about 6 percent.
So clearly a lot of these companies
have impressive dividend yields.
Now one thing I like about EPD is
that they recently signed a long
term contract with Chevron
and this is allowing for EPD
to develop their seaport oil
terminal which is on the Texas
Gulf Coast.
And this is likely to take a few
years to build.
But knowing that they have a long
term contract with Chevron makes
it a lot easier to commit the one
or two billion dollars it's going to
cost them to build it.
It's much easy to do that when you
know you have waiting customers.
I would expect for this 6 percent
dividend yield to remain reliable
and likely continue to increase
going into 2020 and
beyond.
Okay now we jump over to our final
MLP and then we're going to look
quickly at the 2 bonus MLP
that we have after them.
Next up we have the TC Energy
Corp ticker symbol TRP
and as is true with the other two
MLPs, the dividends for TRP
have been very consistent
and projections have the moving
even higher over the next couple of
years.
So as you can imagine these are
one of the main reasons that I
wanted these three companies on this
list. I believe these are
three of the most reliable dividend
payers out there.
Now yes TC Energy
has done a good job of increasing
their dividends.
And based on their dividends over
the past year well their dividend
yield is currently more than five
and a half percent.
So another great dividend stock
but they're in a slightly different
position than the first two MLP.
So TC energy has recently
come off some they've sold
some of their assets to try to
reduce deleverage on their balance
sheet. Now I'm not terribly
concerned about this reduction
in assets because they still got
on as strong our natural
gas pipeline that's growing fairly
strongly. This should help keep
their free cash flow strong enough
to maintain their dividend.
Now TC energy has been tied
to the Keystone pipeline and I'm
sure we've all heard the regulatory
issues or the regulatory struggles
tied to the Keystone pipeline.
And this was hurting to see energy
for a while but
they've had a great 2019 since
it seems that Keystone is moving
in their favor from a regulatory
standpoint.
Okay. So those are the top three MLP
that we have for very secure
divisions.
Now we have two bonus companies that
I also suspect will have fairly
secure dividends for the next couple
of years. But for some reason
we thought that they fell behind
these top three.
So the first company is Kinder
Morgan ticker symbol KMI
now just like the other MLPs I
expect for Kinder Morgan to do quite
well since they're well positioned
in the midstream market.
So I did keep them off the top three
list. Well this is a chart of their
dividend history going back the past
few years.
And as we can see they're not nearly
as stable as the companies we
ultimately went with.
Now I do believe that they will
continue to grow their dividends.
Analyst expectations seem to believe
the same thing but they
weren't quite good enough to make
the top three list.
Kinder Morgan currently has a
dividend yield of about four and a
half percent.
Okay. Onto our next company that's
Plains All American ticker symbol
PAA.
So PAA recently went
through a restructuring over the
past few years and they cut their
distributions quite a few times
now.
They're expected to continue to grow
from here.
And ultimately I think that they're
6 percent or so dividend yield
is fairly stable.
I think that they're in a fairly
good position.
I just wouldn't classify them quite
as steady as the top
three companies that we ultimately
chose.
So what do you like
do you like the top three
MLP is that we ultimately decided to
go with do you like the bonus
companies who have a different MLP
that you would prefer to hold for
the long haul let me know what you
think in the comments below.
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Thank you so much for stick with me.
Although it into the video and I'll
see in the next video.
Thanks.