Portfolio Action Summary

• Alliance Holdings (NASDAQ: AHGP) downgraded to Sell in Aggressive Portfolio
• PBF Logistics (NYSE: PBFX) added to Growth Portfolio. Buy below $28 
• Buckeye Partners (NYSE: BPL) upgraded to Buy below $83 in Aggressive Portfolio
• DCP Midstream (NYSE: DPM) upgraded to Buy below $42 in Growth Portfolio
• Oiltanking Partners (NYSE: OILT) dropped from Conservative Portfolio after merger with EPD
• Plains All American (NYSE: PAA) buy limit reduced to $58 in Conservative Portfolio
• Plains GP Holdings (NYSE: PAGP) buy limit reduced to $30 in Growth Portfolio
• Shell Midstream Partners (NYSE: SHLX) downgraded to Hold in Growth Portfolio
• Teekay Tankers (NYSE: TNK) buy limit increased to $7.50 in Aggressive Portfolio
• TransCanada (NYSE: TRP) buy limit reduced to $52 in Conservative Portfolio

Alliance Holdings (NASDAQ: AHGP) delivered strong year-end results, but the general partner of a coal mining MLP lowered expectations for 2015. It’s been hurt by competition from cheap natural gas and the recent breach of a long-term, above-market contract by a customer citing new pollution controls mandated by the Environmental Protection Agency. The unit price is down 13% since the beginning of the year, and could be headed lower as more high-priced contracts expire. We’re downgrading AHGP to Sell.

AmeriGas Partners (NYSE: APU) reported an 18% decline in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for its fiscal first quarter, as the unusually cold weather enjoyed a year ago by the leading propane distributor was followed by unseasonable warmth in late 2014. AmeriGas also ended up selling propane stockpiled earlier in the year relatively cheaply, as the fuel’s wholesale price plunged 55% during the final three months of 2014.

Despite those drags, the partnership produced 10% more cash flow than needed to cover distributions over the last 12 months and forecast annual EBITDA just 2% below last year’s cold-aided record. The trailing distribution yield stands at 6.9% even after the 7% increase in the unit price since the beginning of the year. As propane stockpiled earlier is gradually replaced with cheaper fuel, margins should get a boost, even as lower retail prices stimulate demand. With a 32% portfolio return for us over the last year, APU remains a buy in any dips below $51.   

Antero Midstream Partners (NYSE: AM), the Appalachian gas gathering affiliate of Antero Resources (NYSE: AR), declared its first distribution since the partnership’s Nov. 4 market debut, and issued 2015 guidance. The partial payout of 9.43 cents per unit is the prorated equivalent of the minimum quarterly distribution of 17 cents a share promised in filings before the initial public offering, and works out to an annualized yield of 2.8% based on the unit price of $24.47 as of Feb. 13.

The partnership expects the quarterly distribution to increase 28% to 30% over the next year, with distribution coverage of 1.1x to 1.2x.

Antero Midstream plans to spend as much as $435 million on expansion projects this year in support of its sponsor’s recently reduced but still robust drilling program. Antero Resources plans to increase its output from gas wells in the Marcellus and the Utica shales by 40% in 2015 with 14 rigs, down from 21 late last year. With natural gas prices down and its sponsor’s sails trimmed, AM’s unit price is down 20% from where it opened on the day of its IPO but up 18% over the last month. This remains a promising growth vehicle that could move up alongside natural gas prices. Quarterly and annual results are due Feb. 25 after the bell. Buy AM below $30.        

Boardwalk Pipeline Partners (NYSE: BWP) reported improved fourth-quarter results marking an important milestone in the gas shipper’s race to replace dwindling demand for northward transport from the Gulf Coast. Distributable cash flow was sufficient to provide a 10% yield rather than the 2.4% one Boardwalk is offering following its shocker of a distribution cut a year ago.

All such operating surpluses are set to be invested for the next two years into $1.5 billion of growth projects backed by fixed commitments and secured by management over the last year or so. Once those are up and running, Boardwalk would very likely raise its distribution once again, even if it doesn’t quadruple it back to 40 cents per unit, as Credit Suisse recently predicted it might while setting a Street-high $25 price target.

Boardwalk is reinventing itself as a shipper of Appalachian gas to the Gulf Coast and from there into the fast-growing Southeast, while also catering to the petrochemical boom in Texas and Louisiana. Gas and NGL shipment volumes are already showing signs of growth, and what once looked like a potential revenue cliff caused by the expiration of firm south-to-north shipping commitments is now a plateau at least through 2016, at which point recently initiated projects should pick up the slack. The unit price fell 14% in January but has rebounded 11% so far this month. Buy BWP below $19.

Buckeye Partners (NYSE: BPL) reported improved fourth-quarter results despite some near-term drag from lower crude prices. The reduced value of vapor recoveries at its terminal and diminished butane blending margins set back earnings by an estimated 5%. Yet adjusted EBITDA jumped 25% aided by recent acquisitions, improved demand for crude storage as a result of the futures contango and even an early indication that lower prices and more economic growth might boost pipeline demand. December volumes in that segment were up 3% year-over-year in December.

The distribution coverage was a strong (by Buckeye’s standards, at least) 1.1x on a payout that rose 4.6% year-over-year for an effective current yield of 6.1%. One of management’s key goals for 2015 is to increase the pace of distribution growth, something it should be able to achieve in the second half once the first phase of a south Texas LPG shipping joint venture with Trafigura comes online. In the meantime, management expects coverage to slip during the seasonally weaker next to quarters. But while lower crude prices were a net negative over the last three months, the longer-term effect could be modestly positive as Buckeye recontracts its scarce storage capacity at higher rates, and perhaps as low prices stimulate demand and pipeline traffic.

The major Trafigura project is proceeding on time and on budget, and will be a big positive for the partnership at least for the duration of the 7- to 10-year minimum volume commitments the bib international trader has made to Buckeye. That’s a big reason why the unit price has been among the most stable during the recent slump, closing the year at its mid-August levels and drifting only 1% lower since. We’re upgrading BPL to a Buy below $83.

Capital Products Partners (NASDAQ: CPLP) reported an 8% increase in its operating surplus, the tanker partnership’s key measure of cash available for distribution, as it recontracted expiring charters at increased rates in a shipping market lifted by low oil prices, higher refinery output and more lucrative trading opportunities. While the fourth quarter’s distribution was kept at the level that has prevailed since 2011, covering a deep slump in rates, CPLP has made clear it plans to raise it the next time it reports results. As is, a payout offering a 10.2% yield had improved coverage of 1.2x. The charter book has an average remaining duration of nearly eight years, with 83% of capacity booked for 2015 and 64% in 2016, leaving just enough exposure to the still improving rates, both spot and term.

Management is convinced the crude and fuel shipping business has entered a new growth phase, and is determined to refloat the waterlogged unit price, an ambition that could play into the forthcoming distribution increase. CPLP is also refinancing its relatively modest debt. The shipper has returned 21% since we added it to the Aggressive Portfolio two months ago. CPLP is the #7 ranked Best Buy below $10.

Cedar Fair (NYSE: FUN), the operator of large amusement parks, is scheduled to report fourth-quarter earnings before the bell on Feb. 19. The unit price is up almost 20% since Dec. 10 and 4% since we recommended Cedar Fair four weeks ago. Our bullish case then was similar to that cited by Goldman Sachs when it upgraded FUN to Buy on Feb. 2: easy comparisons and the strong benefit this unusual partnership should reap from improving consumer spending bolstered by the low gas prices. Buy FUN below $58.

CVR Refining (NYSE: CVRR) reports quarterly results Feb. 19 before the opening bell, its variable distribution riding on the outcome. The unit price is up 42% since we ranked CVRR as the #10 Best Buy on Jan. 21. It has been lifted by the strong earnings results of larger refiners and the widening Brent-WTI crude spread, which bolsters refiners’ margins and cost advantage over foreign rivals. Still, CVRR’s chart remains one of the sector’s weakest, and the price is down 19% from October’s high. The yield is 14.5% based on the distributions over the past 12 months. Buy CVRR below $26.

DCP Midstream Partners (NYSE: DPM) is the largest gas processor in the U.S. and one that claims to rely on fixed fees or hedges for 90% of its revenue in 2015 and 70% of revenue in 2016, thereby gaining plenty of protection against natural gas liquids prices that declined more than 50% during the fourth quarter. Unfortunately, the bulk of its hedges is with its general partner DCP Midstream as the counterparty, and the GP is largely unhedged itself and as a result is about to take a bath that could propel its ratio of debt to EBITDA well past the limits specified in borrowing covenants.

DCP Midstream has responded by recently axing 20% its administrative staff, while co-owners Phillips 66 (NYSE: PSX) and Spectra Energy (NYSE: SE) agreed to forego profit distributions from the joint venture. Still, the CEO of Phillips 66 acknowledged on a recent conference call that those steps and a 50% cut in DCP’s capital spending “probably doesn’t fix DCP for 2015” barring a significant rebound in NGL prices.

Moody’s and Fitch have both recently downgraded the credit rating of the general partners. As a result, DPM’s unit price is down 19% year-to-date and 31% since late October ahead of earnings due Feb. 24 after the market close. Many analysts have lowered their targets on the MLP’s equity as well. On a positive note, the equity has more recently seen heavy call option purchases speculating on a positive reaction to the upcoming results. Perhaps the general partner may speed up dropdowns to downsize its debt in line with reduced cash flow.

Longer term, DCP Midstream Partners’ exposure to many of the fastest growing U.S. shale basins should mitigate the near-term risk. So are the deep pockets of Phillips and Spectra and DPM’s 8.1% current yield based on a distribution recently increased 6.5% year-over-year. Given the yield, attractive scale and the divided attention of its corporate backers, DPM could also become acquisition quarry. We’re upgrading DPM to a Buy below $42.     

Delek Logistics Partners (NYSE: DKL) raised its quarterly distribution 22.9% year-over-year, for a prospective yield of 5.1% at the current price. The refinery logistics partnership is due to report earnings after the market close on Feb. 23. In early January, DKL announced new and more lucrative shipping agreements for its Paline crude pipeline running from northeast Texas to the Gulf Coast, which will aid its goal of growing the distribution by at least 10% annually. The unit price is up 12% year-to-date. Buy DKL below $42.

Energy Transfer Equity (NYSE: ETE), the general partner or the largest family of affiliated MLPs, reported on Feb. 18 that its distributable cash flow per unit increased 27% in 2014. Fourth-quarter distributable cash flow provided 1.0x coverage for a distribution recently increased 30% year-over-year increase, for a current yield of 3%. That will be supported by a new $2 billion share buyback program unveiled by the partnership. Meanwhile, the timetable for final go-ahead for a key liquefied natural gas export project has slipped into 2016 based on regulatory delays, according to the partnership. Energy Transfer Equity said it remains fully committed to the project along with partner BG Group (London: BG). The unit price dropped in early January but has since recovered with a 19% rally since Jan. 13. ETE is the #3 Best Buy below $66.

Energy Transfer Partners (NYSE: ETP) reported a 34% increase in distributable cash flow per unit for the quarter and a 52% surge for all of 2014. The distribution coverage was 1.12x in the fourth quarter on a payout recently increased 8.6% year-over-year, for a 6.9% yield.

Energy Transfer Equity’s largest MLP affiliate recently agreed to buy corporate kin Regency Energy Partners (NYSE: RGP) in a $18 billion equity-swap deal. The transaction will reduce the merged entity’s cash distributions relative to what ETP and RGP were paying out on their own. The deal will be immediately accretive to ETP’s distributable cash flow, helped by $320 million in rebates from ETE over the next five years.

Another recent intramural deal retiring 30.8 million units held by ETE as part of a trade for another slice of incentive distribution rights in Sunoco Logistics (NYSE: SXL) will boost the recently improved distribution coverage.

The unit price is down 11% year-to-date after dramatically outperforming the sector since September. ETP is the #4 Best Buy below $70.

EnLink Midstream (NYSE: ENLC), the general partner to a mid-continent gathering and processing MLP sponsored by Devon Energy (NYSE: DVN), reported $66 million in cash available for distribution for the fourth quarter,  providing coverage of 1.71x on a dividend yielding 2.7%.

Last month, ENLC raised its quarterly distribution by half a cent, taking just nine months to meet its goal of growing it at least 30% in its first year. But that was a smaller increase than the one-cent raise the prior quarter or the four-cent hike in July.

In addition to releasing its earnings, ENLC also announced on Feb. 18 the dropdown to of another 25% interest in midstream assets contributed by Devon last year to its EnLink Midstream Partners (NYSE: ENLK) MLP affiliate. It will be compensated with 31.6 million ENLK shares valued at $925 million. The transaction leaves another 25% interest in Devon’s assets to be dropped down later this year.

EnLink recently announced a $600 million acquisition of the Coronado gathering system in the Permian basin, which should, like the Devon dropdown, accelerate the flow of incentive distribution rights from ENLK to ENLC. The acquisition is expected to be neutral to the distributable cash flow at ENLC as well as ENLK in the near-term, with considerable upside should crude prices recover.

ENLC is targeting dividend growth of 18.5% in 2015, based on the expected 7.5% distribution increase at ENLK this year. Both entities are targeting annual distribution coverage of 1.0x to 1.1x, though ENLK was at just 0.92x in the forth quarter and signaled subpar coverage in the first quarter as well as a result of a recent acquisition. 

The unit price is up 10% this month after declining 23% between the end of September and the end of January. Unleveraged Devon is an excellent sponsor to have, and ENLC remains a Buy below $44.     

Enterprise Products Partners (NYSE: EPD) reported a 5% year-over-year increase in its fourth quarter gross margin and a 4% bump in distributable cash flow, good enough for 1.5x coverage on a distribution that increased 5.7% in a year’s time.

Per-unit earnings dropped as the 32% year-over-year plunge in the price of natural gas liquids, which are tied to crude, squeezed the variable portion of the partnership’s processing margins.

But new crude and NGL pipelines provided an offsetting lift, as part of the $4.1 billion in new fee-generating assets brought online last year.

For the moment, the main effect of the oil crash on EPD’s plans has been to slow its anticipated investment in new projects from $4 billion to $3.5 billion this year. That’s still roughly twice the minimum required to maintain the current distribution growth pace.

The unit price is down 4% year-to-date and a reasonable 15% since the end of August. Very few other MLPs can match Enterprise’s financial flexibility, strategic assets and the scale necessary to exploit those advantages, which is why EPD remains our #1 Best Buy below $42.50.

EQT (NYSE: EQT), the Marcellus driller and the sponsor of the fast growing EQT Midstream Partners (NYSE: EQM) gathering and shipping MLP, cut its 2015 capital spending plans by nearly 20% and its cash flow forecast by a little more than that, though it still expects to generate $1 billion from operations.

Production is expected to rise by 23%, supporting EQM’s midstream business. In a filing for the initial public offering of the EQM general partner, EQT indicated plans to raise $300 million via the IPO of an unspecified (likely minority) stake in EQT GP Holdings, which is to trade on the New York Stock Exchange under the symbol EQGP and to own all of EQT’s interests in EQM as its general partner and holder of a 34% of the LP units.

If EQM maintains its current pace of increasing its distribution by three cents each quarter, the payout will rise 62% over the next three years. Meanwhile, the leverage provided by incentive distribution rights would nearly triple EQGP’s income over the same span.

EQT’s management has contended that EQGP’s estimated terminal value of $4.6 billion is not adequately reflected in EQT’s share price. It hopes the IPO, expected to take place sometime near midyear, changes that.

The high valuation this leveraged growth play on a leading Marcellus midstream growth vehicle is likely to command was the primary reason we recommended EQT in December. The share price dropped 27% between Nov. 6 and Jan. 15, but has since risen 12%. Buy EQT below $100.

EQT Midstream Partners (NYSE: EQM), meanwhile, continued to deliver strong results, with fourth-quarter distributable cash flow providing 1.85x coverage on a payout that rose 26% in a year’s time and currently yields 2.7%. where

EQM’s 16-year transmission and 10-year gathering contracts with firm volume commitments have no direct commodity exposure, and its own capital spending plans have not changed despite the drop in natural gas prices, because it continues to see strong demand, both from EQT and third-party producers.

The unit price fell 12% during the first two weeks of January but has since recouped the bulk of those losses. Only the gradual but growing drain of EQT’s incentive distribution rights has us recommending holding rather than buying EQM at the moment, and that might change if natural gas were to rally. For now, EQM remains a Hold.

Exterran Holdings (NYSE: EXH), the leading U.S. compression services supplier recommended a month or two early in November, declared another quarterly dividend of 15 cents a share last month, equating to a 1.9% annualized yield, ahead of earnings due Feb. 26 before the market open.

While the share price has declined 15% in the three months since the recommendation, it’s performed better lately, rallying 19% so far in February with an assist from higher oil prices. Exterran has traded as if it’s leveraged to the declining drilling activity, whereas in fact it’s tied to overall production, which is still rising for both oil and gas and is expected to continue to do so after a relatively flat 2015.

Exterran’s plans to spin off its extensive international operations (alongside all the debt) into an independent company look promising for the U.S. based remainder, which includes general partnership and a limited partner stake in the Exterran Partners (NYSE: EXLP) MLP. The spinoff, expected to take place in the second half of the year, is a potential catalyst. But we’re more excited about what might happen when the market realizes that, despite some margin pressure, the bulk of Exterran’s business isn’t going away just as it didn’t go away in 2009 or 2012. Deutsche Bank’s energy analyst recently named Exterran Holdings his top pick, while Howard Weil called it a “focus stock” in December. Buy EXH below $42. 

Exterran Partners (NYSE: EXLP) recently raised its distribution 4.7% year-over-year, for an annualized yield of 9.6% at the current price. The distribution coverage was above 1.2x in the second and third quarters of 2014, suggesting the partnership won’t have trouble earning future payouts above current levels, based on its historical performance in prior periods of low oil and gas prices. That near double-digit yield should shrink over time by means of capital appreciation. Buy EXLP below $34.

GasLog Partners (NYSE: GLOP) reported a 38% rise in distributable cash flow from the prior quarter as a result of adding two LNG carriers to bring its fleet to five, with as many as a dozen more to be possibly dropped down over time by sponsor GasLog (NYSE: GLOG).

The payout increased 16% from the minimum distribution declared in the prior quarter, the first full period since the May IPO, and now offers an annualized yield of 7.1%. The distribution coverage was 1.22x for the latest quarter and 1.13x for the year. Management plans to increase the distribution 10% to 15% annually “for next several years,” by purchasing additional ships from GasLog. The fleet’s current average charter duration is 4.2 years. Buy GLOP below $26.

Genesis Energy (NYSE: GEL) recently raised its fourth-quarter distribution 11.2% year-over-year, for an annualized yield of 5.2% at the current price. Distribution coverage for the first three quarters of 2014 was 1.1x. The crude logistics, pipeline transport and refinery services partnership is set to report forth-quarter results on Feb. 19 before the market open. Units have traded 8% higher over the last two months, but remain down 17% since the end of August. Buy GEL below $53.  

Global Partners (NYSE: GLP) lost 30% of its value in the first month after we recommended it in mid-November as an downstream distributor with upside from lower energy prices. Since then, it’s rebounded 22%, aided by the completion last month of a key acquisition dramatically expanding the footprint of owned and supplied filling stations in the Northeast. Meanwhile, the growing Brent/WTI crude spread is good news for the partnership’s crude train shipments from North Dakota.

The distribution has risen 8.8% in a year’s time and currently yields an annualized 6.7% with 2.1x coverage in the first nine months of 2014, meaning Global earned enough to more than double its payout if it so chose. Instead, the surplus has been reinvested in a business that retains plenty of upside in the current circumstances. Earnings are due March 12 before the opening bell. Buy GLP below $50.

Hi-Crush Partners (NYSE: HCLP) reported predictably strong fourth-quarter results, with revenue and adjusted earnings roughly doubling in a year and distributable cash flow rising more than 60%. The fracking sand supplier produced distribution coverage of 1.31x on a payout that rose 32% year-over-year and still yields 7%.

But management acknowledged on the conference call that distribution growth will likely slow this year as Hi-Crush adjusts to the drilling slowdown in response to low oil prices. While 88% of the partnership’s expanded 2015 production capacity is already contracted under long-term, fixed-price agreements with a four-year average span, it’s already negotiating cost reductions with hard-pressed customers, though none had been agreed as of the conference call date.

And while spot demand for fracking sand has been reduced, producers are continuing to use more and more of it, averaging 50 train cars of sand per horizontal well these days, in pursuit of higher initial production rates. The unit price is up 5% since our recommendation four weeks ago but still down 44% since the end of August. With low leverage, strong coverage and the highest output of the premium sand producers prefer, HCLP is a Buy below $40. 

Holly Energy Partners (NYSE: HEP) recently raised its fourth-quarter distribution 6% year-over-year, for a current annualized yield of 6.1%. The refinery logistics partnership’s results are due Feb. 24 after the market close. Since sliding 17% between late November and late December, the unit price has recouped the entire loss. Buy HEP below $40.

Kinder Morgan (NYSE: KMI) marked its first report since the November consummation of its merger with affiliated MLPs by announcing the acquisition of Hiland Partners, the Bakken crude gatherer, gas processor and oil pipeline operator previously owned by Continental Resources (NYSE: CLR) majority owner and CEO Harold Hamm. Though the deal was unveiled with crude trading at $46 a barrel the cost was a steep multiple of 10x Hiland’s expected EBITDA in 2018, and likely more than 15x of this year’s total, with Kinder Morgan saying only that the transaction will be “modestly accretive” to its cash available for dividends in 2015.

The company declared a fourth-quarter dividend of 45 cents a share representing 10% growth year-over-year, out of cash available for distribution of 60 cents a share. Kinder, which currently yields 4.3%, aims to pay out $2 per share representing 15% annual growth over the coming year.

The unit price was among the midstream sector’s most resilient in the second half of 2014 and has been flat so far this year. Buy KMI below $45.

Magellan Midstream Partners (NYSE: MMP) closed out a record-setting year with typically strong quarterly results featuring increased volumes in the partnership’s principal business of shipping and storing refined products, as well as higher crude pipeline volumes and tariffs. Operating margin was up 26% year-over-year, and secured distribution coverage of 1.57x on a payout that rose 19% in a year’s time and currently yields 3.5%.

Although only 15% of its earnings are directly tied to commodity prices, Magellan is conservatively planning on a 5% decline in distributable cash flow in 2015. That would still provide 1.2x coverage for a distribution it expects to increase 15% this year, followed by growth of at least 10% in 2016.

Given the current cash flow surplus, Magellan doesn’t plan to issue equity “in the foreseeable future” to finance its expected $650 million tab this year for the expansion projects already under way. The unit price has traded in a relatively narrow range for nine months now, and is down 3% so far this year. Magellan’s appealing combination of growth, scale and financial conservatism and its upside from recently rising U.S. fuel consumption and refining output make MMP the #2 Best Buy below $90.

MarkWest Energy Partners (NYSE: MWE) recently increased its fourth-quarter distribution 4.7% year-over-year, for a current yield of 5.8%, ahead of earnings due Feb. 25 before the market open. The unit price dropped 20% between Jan. 2 and Jan 12 as natural gas liquids prices hit new lows, and has since recouped half of that decline. A partnership presentation issued earlier this month noted plans to spend $1.8 billion to $2.3 billion on growth projects this year. Buy MWE below $77.   

Navios Maritime Partners (NYSE: NMM) saw its unit price drop 52% between Sept. 10 and Dec. 15, as plunging dry bulk charter rates tied to China’s growth slowdown fed fears about the reliability of the shipper’s distribution. But when NMM reported quarterly results on Feb. 2 management said it had the means to keep the distribution no worse than level for the next two years, and largely as the result the unit price has rebounded 24% so far this year.

The reason NMM could make that promise is that it’s been busy buying containerships under long-term charters to get through the current dry bulk slump without having to cut its payout.

The partnership added one such vessel late last year and its largest containership yet will join the fleet this month, bringing containers’ contribution to the earning stream to 44%. Without the latest acquisition, the cash operating surplus would have fallen significantly short of the payout total in the fourth quarter, though even without it NMM had distribution coverage of 1.1x for all of 2014.

This is a shuffle NMM can keep performing, because long-term debt is at a manageable 2.8x EBITDA, and the partnership retains access to low-cost financing. And in fact management indicated on the conference call that further containership acquisitions are likely this year. In furtherance of that goal, Navios Maritime Partners sold 5.7 million additional units on the heels of the quarterly results, raising $75 million. Buy NMM below $17.70.

Oaktree Capital (NYSE: OAK) reported a 41% drop in distributable earnings for fiscal 2014, as the premier distressed debt manager’s dwindling slate of gains from the 2008-09 financial crisis lacked a worthy sequel to a particularly huge and profitable fund closed out in 2013.

It declared a distribution of 56 cents per unit, down from $1 a year earlier and implying an annualized yield of 4%, though Oaktree’s payouts are variable. During 2014, the partnership distributed a total of $2.71 per unit, for a trailing yield of 4.9%.

While the return of gains from years past has slowed fund inflows have not, lifting Oaktree’s assets under management a strong 9% to $91 billion. last year’s returns, however, were subpar by the firm’s high standards at 9% in the aggregate for Oaktree’s closed-end funds, down from 22% in 2013 and an average of 20% annually since inception.

Those numbers, and the record and reputation of CEO Howard Marks, have been the main draws for the leading global institutional investors on Oaktree’s client roster. They’ve also kept unitholders patiently waiting for Oaktree to deploy its funds as opportunities arise. The recent oil crash and the heavy discounting of energy bonds may present one such opportunity. Coincidentally or not, the unit price is up 20% since the end of November. Buy OAK on dips below $52.   

Oiltanking Partners (NYSE: OILT) completed its merger with Enterprise Products Partners (NYSE: EPD) on Feb. 13, with OILT unitholders receiving 1.3 EPD common units for each OILT unit held, and cash for any fractional remainder. They can expect a higher yield but much slower distribution growth from the much larger Enterprise, the premier natural gas liquids processor. OILT is departing the Conservative Portfolio having generated a 170% return for MLP Profits in two years and three months.  

Plains All American Pipeline (NYSE: PAA) reported in-line fourth-quarter results on Feb. 4, with 1.11x distribution coverage for the quarter and the full year based on a payout that rose 9.8% in a year’s time and offers a current yield of 5.2%.

The distribution was expected to grow roughly as fast based on the partnership’s forecast for an increase of 8.5% to 11.5%, issued in November. But following the latest results that was revised to an increase of 7%, with management citing “adverse impacts of a major step change in commodity prices that is accompanied by a similar change in producers’ activity levels.” Despite the cut, PAA is forecasting a barebones 1.0x distribution coverage ratio this year.

Adjusted EBITDA guidance for 2015 got cut by 6.5% primarily on expectations of reduced crude gathering margins, though earnings are still expected to increase 7% from last year’s levels.

Pipeline transportation profits are expected to keep growing fast however, rising 27% as the partnership builds out takeaway capacity for the fast developing Eagle Ford and Permian basins in Texas.

The unit price dropped 25% between Sept. 9 and Dec. 15, but has since steadied as crude prices have stabilized. It’s up less than 1% year-to-date and barely budged in response to the reduced 2015 guidance. That may be because PAA’s outlook is based on  crude trading at $50 per barrel for the entire year, with upside should oil prices rise in the second half of 2015 as many expect. Buy PAA below the reduced buy limit of $58.

Plains GP Holdings (NYSE: PAGP), the general partner of Plains All American, now expects to increase its own distribution 21% this year, which is down from the 26% growth it was projecting three months ago.

The fourth-quarter distribution represented a 27% year-over-year hike and offer a yield of 2.9% based on a share price that has risen 8% year-to-date. Buy PAGP below the reduced buy limit of $30.

Regency Energy Partners (NYSE: RGP) is expected to complete its pending $18 billion merger with Energy Transfer Partners (NYSE: ETP) in the second quarter of 2015, with unitholders getting 32 cents in cash and 0.4066 ETP units for each RGP unit. That’s a 13% premium based on closing prices on the eve of the announcement. ETP’s somewhat lower yield is more secure, and its lower cost of capital should permit it to develop Regency’s assets more efficiently. The distribution declared by Regency last month match the prior quarter’s, and offers a current annualized yield of 8.3%. Until the merger with ETP is completed, RGP remains a Hold.

Scorpio Tankers (NYSE: STNG) preannounced fourth-quarter earnings of 10 to 14 cents a share ahead of full results before the market open on March 2. It also continued taking deliveries of product tankers from its bulging order book, adding eight ships to its fleet so far this year to bring the total number of vessels to 65. The additional tankers should bring Scorpio additional earnings power in a healthy and improving product tanker market. The stock has returned 2% in the two months since our recommendation, rallying 17% in the two weeks leading up to the Jan. 21 preannouncement and then giving up the entire gain during the next week. Buy STNG below $9.50.

SemGroup (NYSE: SEMG) will release fourth-quarter results Feb. 26 after the market close. Last month, activist hedge fund manager Thomas Sandell, whose firm is not among SemGroup’s top 10 institutional investors, criticized the CEO who arrived last year for not divesting assets in Mexico and the UK and not accelerating the pace of dropdowns into the affiliated Rose Rock Midstream (NYSE: RRMS) MLP to become a pure-play general partner. Sandell also suggested SemGroup sell itself to one of the larger midstream operators, arguing that “given the availability of cheap debt and equity capital, a takeout price of up to $104/share…would easily be justified.”

He’s unlikely to sway well-respected management that’s already proceeding with dropdowns to Rose Rock at its own pace, including this quarter’s expected sales of SemGroup’s 50% stake in the Glass Mountain crude pipeline in Oklahoma and two Colorado extensions of an interstate crude pipeline, to be followed later by the transfer of the company’s four U.S. gas processing plants into the MLP.

SemGroup’s interest in Mexico’s midstream projects is also likely to outlast Sandell’s objections. SemGroup’s previously ascendant share price slid 34% between Sept. 3 and Jan. 13, but has since bounced 24%. Rose Rock’s 7.6 million barrels of crude storage capacity at Cushing, Oklahoma and SemGroup’s 8.7 million barrel UK tank farm are likely to be in strong demand given the current oil market contango. Buy SEMG below $82.

Shell Midstream Partners (NYSE: SHLX) declared its first distribution since the October IPO, though no one will exactly get rich off the prorated minimum distribution yielding 1.5% on an annualized basis now that the unit price has surged 83% since the public offering. The attraction here was always the distribution growth of 20% to 30% annually, powered by further dropdowns from the big corporate sponsor. Investors will be hoping for an update on those plans when the partnership reports its first quarterly results Feb. 24 before the market open. SHLX is now rated a Hold after advancing well beyond our buy limit.

Spectra Energy (NYSE: SE) wrapped up a strong year on a muted note, reporting flat distributable cash flow as higher maintenance costs ate up the increased earnings from the company’s expanded gas, natural gas liquids and crude pipelines. Still, it earned enough to sustain a distribution yielding 4% after increasing 10% in a year’s time with a 1.27x coverage ratio.

That’s down from distribution coverage of 1.6x for all of 2014, and with energy prices now down sharply year-over-year, Spectra is willing to thin that cash flow cushion further in the years ahead to keep the distribution growing quickly.

In an analyst meeting following the annual results, the company committed itself to 9% annual dividend growth through 2017, with 1.2x coverage this year dropping to 1.0x in 2016 and 2017. The issue is largely one of taxes, which are expected to amount to just 0.5% of earnings this year but to rise to the vicinity of 20% after that.

This forecast assumes no recovery for slumping natural gas liquids prices and not much of one for natural gas or crude. It also assumes no contributions from DCP Midstream, the DCP Midstream Partners (NYSE: DPM) parent that Spectra co-owns with Phillips 66 (NYSE: PSX), and whose gas further financial support for DCPM, to the evident relief of shareholders.

The stock retreated 8% during January and saw significant put action in the lead up to the earnings and analyst meeting, but is up almost 10% so far this month. Spectra’s gas transmission projects shipping Marcellus production to the Southeast, Northeast, and Midwest should power its growth for years to come. Buy SEP below $42.   

Spectra Energy Partners (NYSE: SEP) accounts for the bulk of Spectra’s assets and growth as the owner of its US pipelines. Its EBITDA was up 21 percent year-over-year for the fourth quarter and 15% for all of 2014 as Appalachian gas pipeline expansions came online, Texas NGL volumes ramped up and crude transportation tariffs rose. Distributable cash flow provided 1.2x coverage for a payout yielding 4.3% after rising 7.8% year-over-year.

The partnership is aiming to maintain annual 8% distribution increases through 2017, with coverage of 1.1x this year and 1.02x in the two following. The unit price has traded in a very narrow range for 10 months. Buy SEP below $64.

Sunoco Logistics Partners (NYSE: SXL) reported a 13% increase in adjusted EBITDA on Feb. 18, supporting 1.99x distribution coverage on a payout that increased 21% over the last year and currently offers an annualized yield of 3.5%. For the full year, SXL reported distribution coverage of 1.47x. Terminals enjoyed a 65% earnings surge powered by higher volumes as well as margins, although favorable inventory timing played a role.

Despite the slump in energy prices, the partnership is not backing away from any part of its $2 billion growth capital spending slate for 2015, including pipelines providing market access from the Permian and Appalachian basins under long-term fixed-fee contracts.

The partnership also announced the acquisition of the 40% of the West Texas Gulf pipeline system it didn’t already own for $456 million, noting that it remains on the lookout for other acquisition opportunities.

After plunging 26% between Nov. 21 and Jan. 13, the unit price has since rebounded 19%. Sunoco Logistics’ strategic pipelines and terminals should drive continuing rapid growth for years to come under the Energy Transfer MLP family’s umbrella. Buy SXL below $55.

Targa Resources (NYSE: TRGP) reported a 27% jump in fourth-quarter net income per diluted share on Feb. 13, and a 41% rise in distributable cash flow as increased gas processing, fractionation and liquefied petroleum gas export volumes at the affiliated Targa Resources Partners (NYSE: NGLS) MLP boosted the bottom line. The dividend coverage was an improved 1.14x on a payout that was recently increased 28% year-over-year and currently yields 3.1%.

Energy prices are now somewhat below levels Targa identified in December as necessary to secure 1.0x distribution coverage for its plans to deliver dividend growth of 35% at TRGP and distribution increases of 11% to 13% at NGLS. Management seems willing to dip below the 1.0x coverage ratio for a quarter or two, but also seems likely to temper the pace of increases to match its view that prices will recover only a little this year and modestly again in 2016.

The volume of LPG exports from the Targa terminal near Houston is the obvious bright spot, having doubled in the course of last year and appearing to hold those traffic gains in 2015 despite the lower energy prices. The Atlas acquisition should provide cost savings in addition to a much improved tax shield, and Targa’s presence in key growth basins like the Permian positions it well for the eventual oil and NGL recovery.

The share price tumbled 38% between Oct. 6 and Jan. 29, but is up 15% since. TRGP is the #6 Best Buy below $135.

Targa Resources Partners (NYSE: NGLS), which consolidated results with those of parent Targa Resources, posted a 20% increase in fourth-quarter distributable cash flow, good for 1.5x coverage on a distribution that recently rose 8% year-over-year and currently yields 6.8%. Like TRGP, NGLS units have been basing over the past two months after declining dramatically alongside crude and NGL prices. NGLS remains a Hold, because other gathering MLPs now sport even higher yields, while TRGP remains our preferred play on Targa’s growth.

Teekay Tankers (NYSE: TNK) handily topped analysts’ estimates in fourth-quarter results reported Feb. 19, with free cash flow of 35 cents a share, up from 12 cents a year ago.

The best is very likely still to come, because the strongest spot oil tanker rates in six years have risen even more so far during the first quarter, with Aframax vessels that account for 12 of 32 directly owned ships in TNK’s fleet now fetching spot rates of $30,000 a day, up 17% from the quarter just reported and 36% from the third quarter of 2014. TNK’s 10 Suezmaxes can now pursue spot rates of $39,000 a day, up from $26,600 in the quarter just reported.

Even at the fourth quarter’s average Aframax spot rate of $25,700 a day, the company generated a 24% free cash flow yield based on its current share price, even as it continued doling out a modest dividend yielding an annualized 2.1%.

TNK’s exposure to the strong and improving spot market is higher than it’s been in years at 85% of capacity in 2015, leaving plenty of room for additional upside as tankers hired out in the past at lower rates come off charter this year.

Management cited increasing demand for crude as a result of lower prices as the primary reason for the rising rates. It’s also helped that 30 Very Large Crude Carriers have been hired for potentially long-term offshore storage as traders try to take advantage of the crude contango, which has futures contracts for delivery in late 2015 and in 2016 trading well above those for nearby months. Tankers storing crude are tankers not competing for cargoes on shipping routes.

Also boosting oil tanker rates are increased shipments of crude from the Atlantic basin to distant Asia, while product tankers have benefited from strong Asian demand for naphtha and from the increased traffic serving several large new Middle East refineries.

The share price soared 42% between Dec. 24 and Jan. 12, then pulled back to its rising 50-day moving average. It was up 5% in afternoon trading Thursday on the earnings news. So long as oil stays cheap, the future for crude tankers looks bright. Buy TNK below the increased price target of $7.50.  

TransCanada (NYSE: TRP) reported a 10% gain in fourth quarter net income per share and a 9% rise in cash from operations on Feb. 13. The Canadian midstream giant’s preferred measure of comparable earnings per share rose 24% year over year.

TransCanada hiked its dividend 8.3% over the rate that had prevailed for the past year, though the decline of the Canadian dollar against its U.S. counterpart in that time meant that the payout on U.S.-traded shares was down 3% year-over-year.

The company continues to lobby the U.S. government to approve the controversial Keystone XL pipeline despite questions about its current commercial viability given the drop in crude prices. Toward that end, TransCanada recently sent a letter to the U.S. State Department disputing the Environmental Protection Agency’s concerns about the project’s potential effects on the environment.

The share price is down 19% from its Sept. 19 peak, when activist U.S. investors were said to be preparing to press TransCanada to divest its U.S. holdings to an affiliated MLP. Further depreciation of the Canadian dollar is likely to continue to negate dividend growth for U.S. investors.

Yet the company retains large growth opportunities as one half of a dominant Canadian midstream duopoly alongside Enbridge (NYSE: ENB), whose own aggressive divestitures of US assets could serve as a useful model for TransCanada. It’s also notable that the current 3.7% dividend yield consumed just 31% of the funds generated from operations in the most recent quarter. Buy TRP below the reduced limit of $52.

UBS E-TRACS 2x Monthly Leveraged Long Alerian MLP Index (NYSE: MLPL) has ticked up 1% since recommended it a month ago as a play on a recovery in sentiment for the largest U.S. midstream MLPs, with a yield of nearly 12% based on leveraging their distributions. That income component should provide important support for any near-term decline on renewed weakness in crude prices. Buy MLPL below $58.

UGI (NYSE: UGI) adjusted net income slipped 6% year-over-year as unusually warm weather in the U.S. and Western Europe curbed fuel demand. The natural gas and propane distributor was also hurt, along with the rest of the utility sector, by the recent uptick in bond yields tied to faster U.S. economic growth.

The midpoint of the company’s forecast for fiscal 2015 would leave adjusted earnings per share 1% shy of the prior year’s record. UGI has paid a dividend each year since 1885 and increased it for 27 years running. The stock currently yields 2.5%. The share price is down 11% since Feb. 3, yet has returned 26% for the Growth Portfolio in a little more than a year. UGI is the general partner of AmeriGas (NYSE: APU). Buy UGI below $45.  

Western Refining (NYSE: WNR) recently estimated its fourth-quarter net income at $1.22 to $1.28 a share, including noncash adjustments of 14 cents a share, ahead of full results due Feb. 26 before the market open. Analysts still expect operating earnings of 98 cents a share, though that’s up from 90 cents per share a month ago. Western subsequently declared a first-quarter dividend of 30 cents a share on the heels of the $2 per share special dividend paid Dec. 1.

The share price plunged 30% between Nov. 7 and Jan. 15, but has since rebounded 28%. Western has returned 21% since our recommendation in December 2013, and a deeply undervalued play not only on the healthy U.S. refining economics but also on MLP logistics valuations given its 66% limited partner stake in the much more richly valued Western Refining Logistics (NYSE: WNRL) affiliate. Buy WNR below $46.

Williams (NYSE: WMB) reported a 16% year-over-year decline in adjusted income from continuing operations on Feb. 18, and projected dividend payments of $2.38 a share in 2015, which would represent a 22% increase from the 2014 payout. Thereafter, Williams is projecting annual dividend growth of 12.5% in both 2016 and 2017 in a scenario of moderate recovery in energy prices, and 10% annually if prices rebound only slightly. Previously, the company had forecast dividend growth of 15% in each of the next three years.

The growth at Williams will be fueled by rising distributions from its Williams Partners (NYSE: WMB) MLP affiliate. MLP payments to the corporate parent were up 16% in the fourth quarter and are expected to continue growing rapidly following the recently completed merger of Williams Partners with Access Midstream Partners. They will be fueled by the ongoing restart of the Geismar olefins plant following a deadly accident and extensive repairs, and new oil and gas systems gathering output from the Gulf of Mexico for processing onshore.

The share price dropped 25% between Nov. 26 and Jan. 13, but has since rallied 19% in the run-up to the quarterly results. Shares were up another 2% in the early going Feb. 19, yielding 4.7% based on the latest dividend. The company’s growth plans are backed by an extensive gas pipeline network capable of distributing Marcellus and Utica natural gas to growing markets in the Southeast and strategic onshore and offshore assets along the Gulf coast. WMB is the #5 Best Buy below $59.