This Shake-up Could Lead to Tremendous Dividend Growth

Quarterly earnings numbers weren't the only thing investors in Spectra Energy (NYSE: SE  ) and Spectra Energy Partners (NYSE: SEP  ) were greeted with yesterday morning. In tandem with the release, management announced a significant deal between the two in which Spectra Energy will drop down a considerable amount of assets to Spectra Energy Partners. In return, Spectra Energy will be receiving a blend of cash, equity, and a large chunk of debt taken off its books. 

These types of transactions highlight the unique relationship between a parent and its MLP subsidiary. Deals such as these free up the parent to pursue larger growth opportunities without forcing it to sell assets completely. Yes, Spectra Energy is no longer running its storage and transmission business, but it will continue receiving distributions from its cash flow through its ownership stake in Spectra Energy. Motley Fool analyst Taylor Muckerman covers this deal and its effect on shareholders in the video below. 

If you are invested in Spectra Energy, it's likely that you enjoy the yield it provides on top of stock price appreciation. With this in mind, we invite you to check out our latest free report. During the compilation stage, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks and drew up the nine companies covered in this free report. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

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9/26/2016 4:03 PM
SE $41.68 Down -0.63 -1.49%
Spectra Energy CAPS Rating: *****
SEP $44.58 Up +0.12 +0.27%
Spectra Energy Par… CAPS Rating: ****
MPLX $32.81 Down -0.05 -0.15%
MPLX LP CAPS Rating: **