We have Purchased NGL Energy Partners, a Diversified MLP

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After doing some research last night and some ‘thinking’ we have taken a starter position in energy MLP NGL Energy (ticker:NGL).  We have purchased 200 shares to start as we are still a bit worried about the MLP’s—but we think NGL is a superstar company.  We have initiated a position in NGL in our personal accounts as well.

Now we have to admit that we knew nothing about NGL before yesterday–never was on our radar screen.  I guess you could say it is one of the few MLP’s with 15 billion in revenue that we weren’t aware of until coming across an article discussing it.

NGL is a vertically integrated midstream energy company.  They have pipelines, railcars, trucking, storage and distribution terminals, salt water disposal wells and retail propane distribution.  They have the midstream well covered.  Theirwebsite is here.  The company increased their guidance for EBITDA for 2015 and 2016 yesterday which is a super bit of news for them and investors.  The company currently pays a 8.76% distributions and trades around $28 (the 52 week range is $22-$46) and we believe there is tremendous upside to the share price.


One caution with NGL—they take ownership of much of the product moving through their system which exposes them to various price fluctuations and introduces a bit of risk to earnings.  The company has seemed to have product in the system well hedged and certainly their earnings would seem to bear that out, but just the same there is some risk.

Take some time to see if this one fits your risk profile—for us it is a tiny starter position which we hope to increase in the near future.

Tim McPartland

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Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
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