Portfolio Update

• Capital Products Partners (NASDAQ: CPLP) downgraded to Hold in Aggressive Portfolio

• DHT Holdings (NYSE: DHT) upgraded to Buy below $8 in Aggressive Portfolio

• EQT Midstream (NYSE: EQM) upgraded to Buy below $80 in Conservative Portfolio

•  Enviva Partners (NYSE: EVA) added to Aggressive Portfolio; buy below $23

• Genesis Energy (NYSE: GEL) upgraded to Buy below $35 in Growth Portfolio

• Global Partners (NYSE: GLP) downgraded to Sell in Growth Portfolio

• Scorpio Tankers (NYSE: STNG) upgraded to Buy below $8 in Aggressive Portfolio

• Targa Resources (NYSE: TRGP) downgraded to Sell in Aggressive Portfolio

• Targa Resources Partners (NYSE: NGLS) removed from Growth portfolio following merger with sponsor Targa Resources (NYSE: TRGP)

 All numbers through March 15 except for EQM, GEL, TERP and TRGP, which are through March 16.  

AmeriGas Partners (NYSE: APU) units have appreciated 8% over the last month and 22% year-to-date, pushing the current annualized yield down to 8.8% Growth pick APU is the #6 Best Buy below $51.

Antero Midstream Partners (NYSE: AM) increased its fourth-quarter distribution 7% from the prior quarter and 29% year-over-year, a growth pace it expects to sustain until at least the end of 2017. The rapid increase in gas volumes from its well-hedged sponsor Antero Resources (NYSE: AR), an aggressive gas driller in the Marcellus, pushed the midstream affiliate’s distribution coverage to 1.8x. Units have rallied 26% over the last month and are now up 9% year-to-date, yielding 3.5% on an annualized basis. Growth pick AM is a Hold.

Archrock (NYSE: AROC) held margins steady amid an 8% year-over-year decline in revenue. The horsepower of its contracted compressor fleet was down 6% in a year’s time. The quarterly dividend was increased for the first time from 15 to 18.75 cents a share, for a current annualized yield of 12.5%. Still, management noted that it lost more business than expected in the fourth quarter as producers stepped up shut-ins of uneconomic wells. Archrock expects more of the same this year and is responding by halving its capital spending. The share price has rebounded 44% over the last month but remains down 20% year-to-date. Aggressive pick AROC is a Hold.

Archrock Partners (NASDAQ: APLP) reported flat fourth-quarter revenue and a 2% dip in EBITDA year-over-year. The quarterly distribution was kept level with the prior payout for the first time in five years, producing coverage of 1.17x on a payout now yielding an annualized 26.5%. The general partner is prepared to support APLP should contracted compression demand wilt further. The unit price is up 27% over the last month but still down 28% year-to-date. Growth pick APLP is a Hold.

Blackstone Group (NYSE: BX) reported a 23% year-over-year drop in fourth-quarter distributable earnings, while for the full year that metric was up 25%. The variable fourth-quarter distribution of 61 cents per unit brought cumulative payouts over the past year to $2.73 per unit, for a trailing yield of 10%. The unit price ticked up 4% over the last month but remains down 7% year-to-date. Growth pick BX is a Hold.

Boardwalk Pipeline Partners (NYSE: BWP) reported improved fourth-quarter results, with EBITDA up 19% year-over-year and distributable cash flow flat despite higher maintenance spending and interest costs. The debt/EBITDA ratio declined to 4.8 from 5.4 a year earlier. Firm transportation contracts for 2016 grew 12% over the past year and are now expected to remain steady in 2017, reversing the declines responsible for the drastic distribution cut in 2014. The unit price jumped 23% over the last month and is now up 8% for the year. Aggressive pick BWP is a Hold.

Buckeye Partners (NYSE: BPL) posted a 9% increase in fourth-quarter adjusted EBITDA, boosted by  strong demand for its crude storage tanks and incremental cash flows from recently completed crude processing projects in South Texas. The distribution coverage improved to 1.14x for the quarter and 1.02x for all of 2015. The payout rose 4.4% year-over-year, and Buckeye plans to keep increasing it by 1.25 cents per unit per quarter in 2016. Units yield 7.3 after rallying 12% in the last month, but have slipped 1% year-to-date. Growth pick BPL is a Hold.

Capital Products Partners (NASDAQ: CPLP) continues to sink, depreciating 30% over the last month and 54% year to date. Several analysts downgraded the operator of tankers and containerships after its recent annual report confirmed a request for discounts from its containership charterer Hyundai Merchant Marine. The troubled Korean shipping line is scrambling to refinance its heavy debts amid mounting losses. CPLP’s rapid drop has pushed its yield up to 38%, and 23% solely from its tanker charters. Although there appears to be lots of long-term value in the stock we won’t continue to recommend buying a security with this much downward momentum. Aggressive pick CPLP is downgraded to a Hold.

Cedar Fair (NYSE: FUN) reported 7% gains in revenue and adjusted EBITDA to new records for all of 2015 as cheap gasoline and low unemployment continued to full its amusement parks. The distribution has increased 10% over the last year and yields an annualized 5.8% after 9% rise in the unit price over the past month. Units have appreciated 2% year-to-date. Growth pick FUN is a Hold.

Columbia Pipeline Group (NYSE: CPGX) has rallied 37% over the last month and 15% year-to-date, jumping last week on reports of buyout talks with TransCanada (NYSE: TRP) as the Canadian pipeline giant looks to increase its exposure to growth in the Marcellus and Utica shales. The overlap between these busy shale basins and Columbia’s pipes drove the 6% increase in fourth-quarter EBITDA as well as the 3% distribution increase from the prior quarter. Units now yield an annualized 2.2%. Growth pick CPGX is a Hold.

DCP Midstream Partners (NYSE: DPM) reported a 22% rise in 2015 EBITDA boosted by recently completed projects and commodity hedges, but as the latter roll off in 2016 the leading U.S. gas processor has more retrenching to do. It hopes to keep the distribution flat in 2016 even as coverage declines to 1.0x from 1.2x last year. The yield is down to 12.6% after a 39% rally over the last month that’s pushed the price marginally year-to-date. Aggressive pick DPM is a Hold.

Delek Logistics Partners (NYSE: DKL) has advanced 17% over the last month but remains down 19% on the year. The annualized yield stands at 8.1% on a payout slated to continue growing 15% annually.  Growth pick DKL is the #4 Best Buy below $40.

DHT Holdings (NYSE: DHT) reported strong fourth-quarter results, with EBITDA more than doubling in a year’s time and net income surging to 35 cents a share, which led DHT to pay a dividend of 21 cents a share in line with its policy to pay out 60% of net income. Quarterly dividends paid over the past year have added up to 69 cents a share, for a trailing yield of 11% based on the current share price. And while spot charters on DHT’s fleet of crude tankers averaged $58,700 per day in 2015, by early February 66% of the fleet’s spot availability was already booked at an average of $73,300 a day. In addition to the rapidly rising dividend, DHT has allocated some of its recent cash surpluses to paying down debt. The board has also authorized a $50 million share buyback. The stock is up 10% over the last month but still down 22% year-to-date. Aggressive pick DHT is upgraded to a Buy below $8.      

Energy Transfer Equity (NYSE: ETE) has rebounded 17% over the past month, recouping all of the ground lost in early February after the abrupt dismissal of its CFO, who has since sued the partnership for breach of contract. But the unit price remains down 49% year-to-date amid doubts about ETE’s financial wherewithal to complete its proposed buyout of Williams (NYSE: WMB). As described elsewhere in this issue a convertible offering allowing insiders to defer some of their distributions will save some cash at the cost of ratcheting up worries about potential conflicts of interest. For now, a distribution that’s unlikely to increase any time soon yields 16%. Growth pick ETE is the #2 Best Buy below $15.

Energy Transfer Partners (NYSE: ETP) has ticked up less than 2% in the last month, and remains down 18% on the year. The yield is still above 15%, though only about 90% of the payout was covered by recurring cash flow during the fourth quarter.  For more on Energy Transfer’s fourth-quarter results, see this recent portfolio update. Growth pick ETP is a Buy below $35.

EnLink Midstream (NYSE: ENLC) held its distribution level with the prior quarter, and made plans to maintain that payout in 2016, albeit with reduced coverage of 1.1x, down from 1.2x last year. The affiliated EnLink Midstream Partners (NYSE ENLK) MLP will try to scrape by with coverage of 1.0x on a current distribution it hopes to maintain.  ENLC shares yield an annualized 10.2% after rallying 13% in the last month. They remain down 31% in 2016 amid worries about declining production volumes in mid-Continent. Aggressive pick ENLC is a Hold.

Enterprise Products Partners (NYSE: EPD) has appreciated 9% in the last month, and now yields an annualized 6.3% on a well-covered distribution set to continue growing 5% a year. The unit price is now down less than 7% year-to-date. Conservative pick EPD is the #3 Best Buy below $30.

EQT Midstream Partners (NYSE: EQM) units gained 7% in the last month, and broke back above breakeven for the year on March 16. The Marcellus gas gatherer and shipper has been a clear outperformer throughout the MLP bust, and its modest 3.7% yield reflects 20% annual distribution growth backed by strong cash flow coverage. Its long-term, ship-or-pay transmission contracts are ultimately secured by the financial strength and top-shelf drilling acreage of its sponsor and other nearby drillers. Conservative pick EQM is upgraded to a Buy below $80.

Genesis Energy (NYSE: GEL) raised its distribution by its customary 10% year-over-year earlier this quarter on the strength of cash flow from recently completed projects and its big bargain acquisition of offshore pipeline interests last year. Available cash before reserves was up 63% in a year’s time against an increase of just 17% in common units, boosting the distribution coverage ratio to 1.42. Genesis is facing moderate headwinds in its crude gathering and marine transportation segments as well as in sodium hydrosulfide sales to miners. But its bread-and-butter specialties of logistical services for Gulf refineries and offshore pipelines are more than offsetting those pressures at the moment. The unit price is up 32% over the last month, including the 10% jump on March 16, but still down 17% year-to-date. The current annualized yield is at 8.6%. Growth pick GEL is upgraded to a Buy below $35.

Global Partners (NYSE: GLP) reported quarterly results consistent with its recent 34% cut in the distribution. Crude wholesale margin collapsed from a peak of $45 million in the summer of 2014 to just $6 million in the most recent period, as cheap imported crude increasingly priced the Bakken grades that Global ships out of the U.S. East Coast. As a result, half of the 2,200 rail cars Global has leased at fixed cost for another three or four more years were rusting in storage as of Dec. 31. The partnership also has financial commitments to pipelines and barges associated with this business, so it’s entirely possible for the shrunken profit to turn into swelling losses in the quarters ahead. That risk is tempered by Global’s much steadier and recently expanded gasoline distribution and retail operations. But that stability has come at a cost of higher debt, interest costs and unit count. So while the current 13.5% yield isn’t nothing, it doesn’t seem especially attractive given high near-term risk, limited upside and competitive yields with much more upside from the likes of Genesis Energy (NYSE: GEL) and Energy Transfer Equity (NYSE: ETE). We got into this MLP for the convenience store Slushies but ended up with a railyard’s worth of useless metal. And that means it’s time to move on. GLP is a Sell from the Growth Portfolio.

Scorpio Tankers (NYSE: STNG) quadrupled cash flow from operations in 2015, taking advantage of rising product tanker charter rates and the dramatic expansion of a fleet now numbering 79 vessels. Current-quarter spot charter rates have been generally trending above those in the fourth quarter of 2015. Scorpio maintained the quarterly dividend of 12.5 cents a share in place for the last year, for a current annualized yield of 8.1%. The share price is up 10% in the last month but down 25% year-to-date.    Aggressive pick STNG is upgraded to a Buy below $8.

Suburban Propane Partners (NYSE: SPH) recently refinanced its expanded secured credit facility at a lower interest rate. The yield is down to 11.9%, while the unit price has rallied 26% since Suburban joined our Growth portfolio a month ago. The propane distribution partnership has appreciated 22% year-to-date. SPH is a Buy on pullbacks below $26.

Targa Resources (NYSE: TRGP) tempered prior 2016 guidance after delivering fourth-quarter results, forecasting little if any growth in gas plant inlet volumes and backtracking on expectations of 10% dividend growth this year. But the share price has been on a tear all the same, appreciating 75% over the last month. The stock is now up nearly 12% for the year, leaving the current annualized yield at 12%. Although the company has a long-term future, this looks like an excellent selling opportunity ahead of further declines in domestic oil and gas production. Aggressive pick TRGP is a Sell.   

TerraForm Power (NASDAQ: TERP) continued to trade off the volatile action in the shares of ailing sponsor SunEdison (NYSE: SUNE). The share price slumped 8% on March 16 after TerraForm said its annual report would be delayed as a result of an internal accounting probe at SunEdison, and also to rectify recently identified weaknesses in internal controls over financial reporting. Despite the setback, the share price is up 21% over the last month, albeit still down 23% for the year. TERP paid its last quarterly dividend in December and hasn’t yet announced the next payout, but on the basis of December’s payout shares now yield an annualized 14.4%. Aggressive pick TERP is a Buy below $10.