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Energy Transfer (ETP)
Cleans the Market's Clock by Posting +56% Gains
Published:
February 4, 2008
As the editor of
StreetAuthority's premium
High-Yield
Investing newsletter, Carla Pasternak is
constantly scanning the domestic markets for stocks with generous yields.
In fact, she has devoted an entire portfolio to securities
offering robust payouts of 10% or more. However, Carla isn't
just interested in what a company is distributing to
shareholders today -- but what it will be paying tomorrow as
well.
It was that forward-thinking that led her to Energy Transfer
Partners (NYSE: ETP, $50.01) in March 2006. The company owns
an array of gas storage and treating facilities, as well as
14,000 miles of pipeline. As Carla pointed out, pipeline
operators rake in fees based on the volume of gas shipped
through their networks -- and ETP already had long-term
contracts in place to guarantee a steady stream of future
revenues and cash flows.
And because
master limited partnerships (MLPs) typically pay out
the lion's share of their earnings to shareholders, ETP had
raised its distributions every year since 1997. When she first
introduced the stock to readers, ETP offered regular quarterly
payouts of $0.55 per share (unit), for a respectable yield of
6.0% -- but Carla saw further increases ahead.
As expected, the company continued to return more and more cash
to its owners. Shortly after Carla's profile, the quarterly
dividend was increased to $0.59 per share, then $0.67, then
$0.75, then $0.77, then $0.81... all the way up to last month's
distribution of $1.13 per share. Even assuming no further increases are in
the cards, the stock offers annual payments of $4.50, for a
beefy yield of 9.0%.
Meanwhile, the shares haven't exactly been sitting still all
this time, having climbed from roughly $36 to $50. As a result, those
who bought the stock following Carla's recommendation have
enjoyed distributions of $6.32 and capital gains of $14, for a
hefty total return of +56%.
In this month's newsletter, Carla shines the spotlight on an
elite mutual fund whose portfolio is chock full of companies
with strong (and rising) dividend yields. With a global approach
and a veteran management team at the helm, the fund posted an impressive gain
of +22.9%. And this outperformance is nothing new; the fund has
beaten 99% of its peer group over the past 3, 5, and 10-year
periods.
To read more about this fund, and to see a complete listing of
Carla's top recommendations, we invite you to become a
High-Yield Investing subscriber. To learn more,
please
visit
this link.
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Nathan Slaughter
StreetAuthority Staff Writer
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Income Security
of the Month
Our "Income Security of the Month" for August 2008 invests in a
fast-growing overseas market that doesn't get much exposure in the
mainstream financial press. And although it typically makes enormous
annual dividend payments -- it has paid an average dividend of
25.5% per year over the past five years -- this fund is perhaps
most appealing for its total return potential. Specifically, the
fund has delivered total returns of +178.9% since 2003,
and it ranks in the top 10% of its category over the past decade.
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Top
10 Stocks for 2008!
Since we began publishing this report back in 2003, the picks we've
featured have consistently beaten the broader market -- delivering average
gains of +21.3% per year and outperforming the S&P by a nearly
2-to-1 margin. Act now to reserve your copy of our newest report -- Top
Ten Stocks for 2008. |
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