Author Topic: Anyone investing in midstream pipelines?  (Read 1134 times)

FrugalSaver

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Anyone investing in midstream pipelines?
« on: October 06, 2019, 09:21:31 PM »
Appear very undervalued and yielding 5-10% depending on who you invest in

I especially like that they are massively paying down debt and appear to be very under valued

electriceagle

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Re: Anyone investing in midstream pipelines?
« Reply #1 on: October 07, 2019, 06:22:52 AM »
No, but my mid-pipe streamlines are consistently above-ground.

(You might get better responses if you provide context so that others can understand what you are getting at.)

YttriumNitrate

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Re: Anyone investing in midstream pipelines?
« Reply #2 on: October 07, 2019, 06:37:11 AM »
I owned Kinder Morgan for a while. As an investment, it was okay, but every year I disliked dealing with the K1 tax form. I believe since then they have changed their structure and are no longer a master limited partnership.

GoCubsGo

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Re: Anyone investing in midstream pipelines?
« Reply #3 on: October 07, 2019, 08:48:53 AM »
I've owned KMI (Kinder Morgan- KMI is not an MLP) on an off for years.  I used to work in the industry and for the most part Richard Kinder is a regarded as pretty smart guy who likes to buy in on cheap opportunities.  He puts his money where his mouth is and owns a lot of stock personally.  They got pounded a few years ago after a dividend cut and the stock got crushed.  Had some nice price growth along with 5% yield the past year or so.

Definitely worth looking at.

Buffaloski Boris

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Re: Anyone investing in midstream pipelines?
« Reply #4 on: October 07, 2019, 09:18:43 AM »
Iíve considered it. But decided against it for now. Now, keep in mind Iím extremely loathe to critique any investment philosophy that differs from the norm. Iím also not an investment advisor so this is just how I looked at it when I did look at these stocks in the recent past.

In the end, I see this as an oil strategy. Which Iím all for given that those stocks have been cheap lately. The problem is the pipeline stocks arenít cheap. A few are, but you gotta wonder why? The typical PE ratios are around 20, which is about the same as the very pricey average for the SP 500. So, Iíd be tied to oil, which in the very long term is not so great, and I wouldnít be buying on sale. Iíd rather own good oil stocks on sale. So my decision was to take a pass.

trollwithamustache

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Re: Anyone investing in midstream pipelines?
« Reply #5 on: October 07, 2019, 09:22:40 AM »
the pipelines come in and out of favor and right now they are out of favor.  Look for a low leverage ratio and higher DCF coverage of the distribution. Not all MPLs are deleveraging as fast as others.  Some are all fee based, others have a surprising exposure to nat gas/oil prices.  If you use Turbo tax, I found the K-1 to be straightforward and no issue at all.

But, once they come back in favor, you have to sell as they will cycle out of favor again.

ColaMan

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Re: Anyone investing in midstream pipelines?
« Reply #6 on: October 07, 2019, 07:23:37 PM »
Yes -- own KMI, WMB, and OKE.  Each yields between 5% and 6.5%, and all have been increasing dividends substantially in recent years.   I expect continued volume growth, especially in natural gas, at least for the next several years.

Rob_bob

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Re: Anyone investing in midstream pipelines?
« Reply #7 on: October 07, 2019, 08:53:16 PM »
 I don't own individual MLP, I use funds that issue 1099 and avoid the K-1.  On second thought I do own one individual one, KNOP, it's not land based but a shuttle tanker service, basically a floating pipeline.

damyst

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Re: Anyone investing in midstream pipelines?
« Reply #8 on: October 13, 2019, 03:40:08 AM »
I invested some money in the community organizations that kicked Kinder Morgan out of British Columbia.
Very happy with the investment, great returns so far :-)