Far too many investors ignore Western Gas Partners LP (NYSE: WES) because the units yield 4.3 percent–well below the 6.3 percent distribution yield offered by the Alerian MLP Index.

Although the stock’s current yield is at the low end of the range for its peer group, Western Gas Partners has grown its payout at an average annual rate of more than 17 percent over the past three years. We expect the MLP’s distribution to increase at an average annual rate of 15 percent to 20 percent over the next two years. This rapid growth makes up for the stock’s subpar yield.

Western Gas Partners owns a network of natural gas and oil pipelines, gathering systems and processing plants in Texas, Oklahoma and the Rockies. The MLP in the first quarter transported an average of 2.41 billion cubic feet of natural gas equivalent per day–up from about 1.5 billion cubic feet of natural gas equivalent per day in the same quarter one year ago.

The majority of Western Gas Partners’ midstream assets serve natural gas-producing fields, but almost three-quarters of its gross margins comes from infrastructure located near the liquids-rich Eagle Ford Shale in south Texas and the Niobrara Shale in Colorado and Wyoming. The MLP’s focus on fee-generating assets and the potential to purchase assets at advantageous prices from its general partner make it a compelling value.

Exploration and production giant Anadarko Petroleum Corp (NYSE: APC), which holds a 44 percent equity stake in Western Gas Partners and owns its general partner, has fueled the MLP’s recent distribution growth through a generous program of drop-down transactions.

The two have struck up a mutually beneficial relationship in the Denver-Julesburg (DJ) Basin of Colorado, where the producer drills actively and Western Gas Partners owns a substantial portfolio of midstream assets.

Anadarko Petroleum plans to drill 170 horizontal wells in the DJ Basin, a drilling inventory that should fuel volume growth on Western Gas Partners’ infrastructure. Moreover, the general partner owns an additional 16 gas-gathering systems, eight processing plants and two liquids pipelines that could be candidates for drop-down transactions. With Anadarko Petroleum investing $1 billion to construct or acquire midstream assets in 2011, the portfolio of assets suitable for drop-down transactions continues to swell.

Western Gas Partners generates about 96 percent of its gross margin under fee-based or fixed-price contracts–many of which are with Anadarko Petroleum–providing a degree of protection against swings in commodity prices. Conservative management also ensures that the firm generates enough distributable cash flow to cover the quarterly payout by a wide margin. Management’s 2012 forecast calls for distribution growth of between 16 and 20 percent, fueled by a combination of new projects coming onstream in the DJ Basin and further drop-downs.

I was impressed with Western Gas Partner’s presentation at the National Association of Publicly Traded Partnership’s (NAPTP) MLP Investor Conference last month. In fact, management outlined what is quite possibly the most clear-cut, low-risk growth strategy of any MLP at the conference.

The stock has pulled back after the MLP on June 19 announced a secondary offering of 5 million common units at a price of $43.88. Assuming the underwriters choose to exercise their 750,000 unit over-allotment option, the MLP would raise almost $250 million.

Investors’ knee-jerk reaction to an offering of new units is to sell the stock because this move ostensibly dilutes the stake of existing unitholders. However, these secondary offerings rarely prove dilutive; MLPs usually plow the proceeds into acquisitions or organic growth projects that increase the amount of distributable cash flow. We’ve found that the temporary selloff that accompanies a secondary offering often presents savvy investors with an opportunity to pick up the units at a discount. Western Gas Partners LP joins the Conservative Portfolio and my Best Buys List as a buy up to 48.