Alliance Holdings (NASDAQ: AHGP) garnered no immediate financial benefit from its operating affiliate’s improved third-quarter results, and is likely to keep its distribution steady throughout 2017 and beyond after slashing it by 43% in April. The current payout redistributes to the unitholders almost all the cash received from the affiliated Alliance Resource Partners (NASDAQ: ARLP), which is expected to generate a cash flow surplus of 50-60% on its own distributions next year. AHGP units recently yielded 7.1% after doubling in price since the coal industry hit bottom in April. Aggressive pick AHGP is a Hold; we recommended selling half of your original stake in October.

Alliance Resource Partners (NASDAQ: ARLP) reported improved third-quarter results relative to the trough of the downturn in the second quarter. Increased domestic demand and a rare export deal drove a 35% sequential rebound in revenue, pushing it 5% above the levels from a year ago. The partnership is counting on a pickup of 5-10% in coal demand next year and a 5-10% drop in its costs as it closes a mine yet keeps production level by ramping up output elsewhere. That should be enough to deliver coverage of 1.5-1.6x on a distribution recently yielding 6.9%. After slashing the payout by 35% in April, management sounds content to keep it level for the next few years barring a stronger recovery that would allow Alliance to lock in higher prices under long-term supply deals. The unit price set a new one-year high on Dec. 7, up more than 80% since late June but with more volatility of late tied to the ups and downs of natural gas prices. Aggressive pick ARLP is a Hold; we recommended selling half of your original stake in October.

AmeriGas Partners (NYSE: APU) reported a 12% drop in adjusted EBITDA for the fiscal year ended Sept. 30. Propane sales volumes fell 10% during the second-warmest year on record in more than a century, and while higher unit margins mitigated some of the damage income was also hit by a $30 million legal reserve. The partnership forecast an EBITDA rebound of 20-30% in the current fiscal year assuming “normal” weather. That would be in line with management’s goal of long-term EBITDA growth of 3-4% annually. The distribution is only up 2% year-over-year as a result of the unfavorable weather, but still yields an annualized 8.4%. The unit price is up 33% from January’s low but down 11% from the July high. Conservative pick APU is a Hold.

BP (NYSE: BP) reported third-quarter earnings down by two-thirds from a year ago based on its preferred measure, as weak refining margins and low energy prices more than offset ongoing cost-cutting. But operating cash flow was down a modest 10% year-over-year, leaving the company on track to fully cover its capital spending plans and dividends from that source next year at oil prices of $50-55 per barrel. Beyond 2017, BP is looking forward to a tapering of the large compensation payments for the Gulf of Mexico oil spill.  The share price advanced 7% in the 10 days to Dec. 9 following news of OPEC export curbs. Conservative pick BP is a Buy below $40.

CONSOL Energy (NYSE: CNX) has returned 38% since we added it to the Aggressive Portfolio eight  months ago. But the natural gas and coal producer ran into a spell of profit-taking over the last two weeks since forecasting gas production growth of 5% for next year, a level some investors apparently found disappointing. We’re not among them. CONSOL’s financially savvy, shareholder-friendly management is focused on long-term value creation, not annual growth percentages. The modest increase is a function of its refusal to drill new wells for much of this year at historically low prices, which will allow CONSOL to realize better returns on its drilling efforts in 2017 and set up a 17% production surge the following year. The recent separation of the drilling joint venture with Noble Energy (NYSE: NBL) provided a significant production boost as well as an immediate cash payoff in exchange for ending suspended cost-sharing arrangements that would not have paid off at all without a sustained period of significantly higher prices. CONSOL plans to eventually divest its interest in the affiliated coal-mining MLP, becoming a natural-gas growth play in the core of the Marcellus and Utica shales. We’re raising the buy limit on our #3 Best Buy to $23. See the front of this issue for a related option trade recommendation.  

Delek Logistics Partners (NYSE: DKL) suffered from reduced crude pipeline revenue and diminished wholesale fuel distribution volumes and margin in the third quarter. Distributable cash flow was down 15% year-over-year, and distribution coverage declined to 0.99x for the period and 1.16x for the past nine months. That didn’t dissuade the partnership from raising its payout 15% year-over-year. The yield was recently at 8.6% after the unit price rallied 35% over the past month, setting a six-month high. Management  is targeting distribution growth of 10% next year backed by cash flow from stakes in two new crude pipelines. Conservative pick DKL is a Hold.

Enbridge Energy Management (NYSE: EEQ) has been rangebound just beneath the 11-month high set in October. The MLP for which it serves as a market proxy, Enbridge Energy Partners (NYSE: EEP) reported steady but unspectacular third-quarter results reviewed last month in a portfolio update. EEP units are EEQ’s only asset, and EEP’s current yield of 9.7% is approximated by EEQ by distributions of additional stock instead of cash. As such, EEQ amounts to an automatic dividend reinvestment plan ideal for an IRA and other deferred tax investment accounts. Conservative pick EEQ is a Buy below $29. EEP is a Buy below $30, also in the Conservative Portfolio.

Enterprise Products Partners (NYSE: EPD) has struggled with diminished gas flows and processing margins, leaving distributable cash flow marginally lower year-over-year and despite the billions spent on the recently completed expansion projects. We covered Enterprise in last week’s portfolio update.   Conservative pick EPD is the #6 Best Buy below $30.

Enviva Partners (NYSE: EVA) posted a 35% year-over-year rise in distributable cash flow, good for coverage of 1.57x on a payout increased 20% in a year’s time. The yield is at 8.2% with the unit price up-and down since hitting a record on Election Day. Management is targeting distribution growth of 12% next year on the heels of the latest dropdown, and the wood pellet MLP’s sponsor is developing more plants and ports across the U.S. Southeast to meet burgeoning overseas demand. That’s coming primarily from Europe, where retrofitting coal power plants to burn wood pellets is the key to meeting ambitious and mandatory renewable energy targets. Demand is also growing in Japan and South Korea, with the U.S. on the backburner as a potentially vast and virtually untapped market. Enviva is a leading global supplier with nearly all of its current shipping capacity contracted for years to come under long-term agreements with power generators. Relatively low debt leverage of 2.2x EBITDA gives it plenty of financial flexibility to expand.  Aggressive pick EVA is a Buy below $29.

EQT (NYSE: EQT) enjoyed a strong five-week run alongside rallying natural gas prices into early December, but then gave back the bulk of those gains as gas prices retrenched and the company’s annual forecast disappointed. EQT plans capital spending of $1.5 billion next year out of operating cash flow of $1.2 billion and cash on hand, along with production growth of 9%. That was lower than preliminary estimates of a 12-15% growth rate next year. Management expects the 2017 spending to drive annual output growth of 15-20% in 2018 and beyond. We remain impressed with the long-term profitability of the company’s recently enlarged acreage at the core of the Marcellus shale, and the stock remains relatively inexpensive, especially given the company’s solid balance sheet. See more on the stock in this month’s Best Buys. Growth pick EQT is the #2 Best Buy below $80.

EQT Midstream Partners (NYSE: EQM) has shed 8% over the past eight weeks but continued to generate steadily growing cash flow. It managed a 1.36x coverage ratio on the third quarter and 1.5x for the past 12 months for a payout increased 20% over that span and set to grow as fast again next year. The yield is up to 4.5%. Conservative pick EQM is a Buy below $90.

Magellan Midstream Partners (NYSE: MMP) exceeded internal expectations with a 6% year-over-year bump in distributable cash flow. That provided 1.2x coverage for a 4.6% yield increased 10% this year and set to grow at least 8% in 2017. The unit price is up 13% in last five weeks on optimism about higher oil prices next year. Leverage is among the lowest for a mature MLP at 3.2x debt/EBITDA, but Magellan is nevertheless contemplating at-the-market equity sales to finance a fairly modest slate of capital projects. The partnership is also interested in acquiring Permian gathering assets to feed its crude pipelines originating in the basin, but hasn’t found any not priced out of its comfort zone to this point. Conservative pick MMP is the #5 Best Buy below $80.

Plains All American Pipeline (NYSE: PAA) reported another quarter marred by  weak crude gathering volumes and logistics margins, and pushed out its hopes for a meaningful recovery until late 2017. Third-quarter distribution coverage slipped to 0.89x on the previously reduced payout of 55 cents per unit, though that’s expected to improve to 1.08-1.10x next year. And that doesn’t count the high cost of equity the partnership has been issuing instead of cash interest on its $1.6 billion private preferred placement. Leverage remains elevated at a 4.5x debt-to-EBITDA. None of that has stopped the unit price from appreciating 21% since Plains announced an effective buyout of its general partner five months ago. The gains are all the more impressive since PAA has sold $443 million of equity under its revived at-the-market offering program into this rally. Still, intensifying competition among midstream operators for the custom of the Texas oil drillers suggest recovery will be a slow process, with distribution growth unlikely to resume before 2018 at the earliest. The yield is down to 6.8%. Growth pick PAA is a Buy on pullbacks below $31.50.

Plains GP Holdings (NYSE: PAGP) shares have outperformed the PAA equity they now track on a 1:1 basis following a reverse split associated with the buyout of PAA’s general partner. PAGP is a dividend payer with a tax shield that ensures its payouts for the next 7-8 years will be classified as tax-deferred returns of capital, and as such its shares are more suitable than PAA units for investment funds and IRAs. As a result, PAGP is trading at a 5% premium to PAA, its yield down to 6.5%  Growth pick PAGP is a Buy on dips below $32.

UGI (NYSE: UGI) reported a 2% gain in its adjusted net income for the fiscal year, as an acquisition materially expanding its European propane distribution business offset warm weather on both sides of the Atlantic. It forecast a 16% rebound on that measure in the current fiscal year assuming weather in line with historical norms. The dividend has increased 4.4% in the last year and currently yields 2.1%. The share price was recently up 32% year-to-date but down 7% since hitting a record in September. Conservative pick UGI is a Hold.