5 MLP Distributions Dead in the Water

It's third-quarter distribution time, and investors' news feeds are clogged with press releases from master limited partnerships spreading the word on their payouts. Not every partnership is full of good news, however, and a few of them, quite frankly, haven't had anything good to report in some time. Today we're looking at five MLPs that held their distributions flat this quarter.

The 5 floaters
The following five MLPs have let their distributions stagnate recently, third-quarter payouts proving no exception. These MLPs show no increase on a sequential or annual basis this quarter:

MLP

Dist.

Annualized

YOY

QOQ

Teekay LNG Partners (NYSE: TGP  )

$0.6750

2.70

Flat

Flat

Natural Resource Partners (NYSE: NRP  )

$0.5500

$2.20

Flat

Flat

QR Energy (NYSE: QRE  )

$0.4875

$1.95

Flat

Flat

Rhino Resource Partners (NYSE: RNO  )

$0.4450

$1.78

Flat

Flat

Navios Maritime Partners (NYSE: NMM  )

$0.4425

$1.77

Flat

Flat

Source: company releases .

The first thing that stands out about this list is that there are no midstream MLPs here. These are exploration-and-production and shipping MLPs, and their income generation, generally speaking, is not as reliable as their pipeline peers, which can make handing out regular distribution increases more difficult.

Teekay LNG Partners has a nice-looking distribution at $0.675, but it's been stuck there for seven straight quarters now, taking a bit of the shine off its 6.4% yield.

Similarly, Rhino Resource Partners, Navios Maritime Partners, and QR Energy have both held their distributions flat for six quarters. But it's Natural Resource Partners that takes the crown here, keeping its distribution steady for nine straight quarters.

But what difference does this make, if any? Does it really matter if an MLP keeps its distribution flat, as long as it isn't going against the cardinal rule for MLPs and cutting it?

Yes and no. It's been well documented that the driver for MLP unit appreciation is distribution growth. While flat distributions aren't the worst thing in the world, you're likely to see some correlation with unit-price underperformance, compared with the rest of the MLP field.

Here's how our five MLPs have performed year to date:

TGP Chart

TGP data by YCharts.

Despite its lackluster distribution history, Navios Maritime Partners is the only MLP that bucks the notion that price appreciation won't happen without distribution growth. It's outperforming the Alerian Index this year, which has returned 20.3% at the time of this writing. Outside of Rhino Resources, the rest of the field's performance results are not terrible, especially given their distribution duds, but they aren't that great, either.

Bottom line
There are more MLPs to choose from than ever before, and investors can afford to be pretty picky. An MLP with reliable distribution growth may ultimately be a better place for your dollars.

9 reliable dividends
Over the long term, healthy reliable dividends can make you rich. The compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. 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.


Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 27, 2013, at 5:30 PM, HectorSector wrote:

    Speaking as a small shareholder in QRE, NRP, and NMM, I'd be content if they went on yielding 10.5-11% indefinitely.

  • Report this Comment On October 28, 2013, at 3:02 PM, smacunalum wrote:

    Not to worry Aimee, the stock price is going down so the yield is going up. Hurray!

  • Report this Comment On October 28, 2013, at 8:23 PM, Geezwad wrote:

    Flat is good, no?

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2701237, ~/Articles/ArticleHandler.aspx, 9/19/2014 10:18:08 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement