Over the past decade, the current universe of energy-focused MLPs has closed 689 acquisitions--a total value of $236.9 billion. With $32.2 billion worth of transactions announced thus far in 2013, these roughly 100 publicly traded partnerships appear on pace to match last year’s total.
Investors should expect this boom in mergers and acquisitions to continue. We examine the factors driving this trend and highlight a handful of potential takeover candidates.
The past five years have been a golden age for energy-focused master limited partnerships (MLP). Fueled by access to inexpensive capital, elevated oil prices and rising demand for infrastructure to support the US energy renaissance, MLPs have posted impressive distribution growth and delivered huge returns since the bull-market rally began in spring 2009. However, past performance isn't predictive of future results. And with many MLPs trading at sky-high valuations, investors will need to be selective and avoid value traps.
Prospective investors in a master limited partnership (MLP) must understand how much the general partner receives in incentive distribution rights and the extent to which this cut inhibits or promotes the limited partners' distribution growth.
Second-quarter earnings season is in full swing. We examine the latest results from the names in our Lifelong Income Portfolio with an eye toward the financial metrics and company- and industry-specific developments that determine dividend sustainability and growth.
No stock is a buy at any price. Although this caveat doesn’t apply to momentum-chasing traders who buy what’s rising and sell what’s falling, valuation is a critical component of the investment strategy underpinning our Lifelong Income Portfolio.
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