The Zacks Analyst Blog Highlights: Oneok Partners, Plains All American Pipeline, Buckeye Partners, TC PipeLines and Kinder Morgan Energy Partners

CHICAGO, Sept. 30, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Oneok Partners (NYSE: OKS), Plains All American Pipeline (NYSE: PAA), Buckeye Partners (NYSE: BPL), TC PipeLines (Nasdaq: TCLP) and Kinder Morgan Energy Partners (NYSE: KMP).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday's Analyst Blog:

High-Energy Dividends from MLPs

If you want exposure to the energy sector but you are unsure about the impact of the global slowdown on crude oil demand and pricing, you may want to consider a Master Limited Partnership, or MLP.

The Oil & Gas Production Pipeline MLP industry group is holding up strong in the Zacks Industry Rank at #48 among 265 industries, along with Oil Refining and Marketing at #22 and Oilfield Services at #49. I talked about this cyclical strength yesterday.

What I neglected to mention is that even though many refiners and service companies are cheap and appear to still have earnings momentum, there could be further downward revisions to earnings estimates yet to come in this slowdown part of the cycle.

And thinking about this last night, it dawned on me that the MLPs are in some ways the perfect blended solution for energy investors. Many energy names have been clobbered as crude oil dropped $30 on fears of the potential recession. As a sector, the pain is visible in the SPDR Energy ETF (XLE), down 25% from its July peak is .

But the MLPs have weathered the storm. With 25 companies in this industry group, many paying dividends yielding near 6%, institutional money appears to be "parking" here because these stocks have suffered little or no losses in the summer swoon.

What's going on here? For further insight, I offer a look back at a colleague's research from early June. Todd Bunton wrote about "4 MLPs with Yields Above 5%" on June 7 and explained the business structure of these companies whose pipelines appear flush with cash.

I want to highlight both his excellent brief description of an MLP as well as his rationale for investing in the space. The section below is taken directly from Todd's article...

Unitholders, Not Shareholders

Master Limited Partnerships raise capital by issuing units, which act much like common shares. Investors buy units of the partnership and are referred to as "unitholders" rather than shareholders.

The MLP itself is not taxed as an entity as it passes through the bulk of its income to unitholders through "quarterly required distributions" (QRD). The unitholders are the only ones that pay taxes, unlike dividends which get taxed at both the corporate and individual level.

MLPs typically operate in low risk, slow-growth industries like oil and natural gas pipelines. Cash flow is usually strong and distributions stable over time.

These strong and stable distributions should provide limited downside risk in a weak market as yield-hungry investors move in and bid up the price.

Although not all MLPs are immune to bear markets and recessions, those with attractive (and sustainable) distribution yields should hold up quite well.

4 for 4 on the MLP Idea

How did Todd's investment idea hold up since June? Quite well. Below are the four companies with a look at each's 3-month price performance and their "Big D" info:

Oneok Partners (NYSE: OKS): Dividend - Yield $2.34 - 5.28%

Plains All American Pipeline (NYSE: PAA): Dividend - Yield $3.93 - 6.68%

Buckeye Partners (NYSE: BPL): Dividend - Yield $4.05 - 6.55%

TC PipeLines (Nasdaq: TCLP): Dividend - Yield $3.08 - 7.09%

Are you convinced yet that some "high energy" dividend payers from MLP land should find a place in your portfolio? If not, be sure to check out Todd's original article on these companies because he has excellent graphics of the distribution history of each these.

Hint: all their distributions have risen at quite a clip in the past ten years. Yes, they could slow down now. But it's definitely a strong and stable trend worth participating in with some capital.

And as coincidence would have it, guess what Todd is writing about today... the most well known of companies in the energy MLP zoo, Kinder Morgan Energy Partners (NYSE: KMP). Currently paying a 6.7% yield, KMP is his Growth & Income pick today with a Zacks #2 Rank (buy).

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com

SOURCE Zacks Investment Research, Inc.