Alon USA Partners LP (ALDW), PetroLogistics LP (PDH): When Value Goes for a Toss, Stick to Dividends

Strong propylene prices offset the effect of lower volumes in the first quarter while softness in the price of propane – PetroLogistics LP (NYSE:PDH)’s primary feedstock – is likely to cushion margins in the quarters to come. The company offers a dividend yield of 21% while a debt equity ratio of 0.98 is not very high for a manufacturing business. Stifel has a price target of $15 on the stock, up nearly 20% from current levels.

Foolish bottom line

Overall, these stocks with strong dividend yields and still meaningful growth may be better for investors looking to spread their risks. High valuations mean the downside also increases for capital, but regular dividend streams can better equip investors to withstand a capital erosion scenario.

Jacob Wolinsky has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Jacob is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article When Value Goes for a Toss, Stick to Dividends originally appeared on Fool.com and is written by Jacob Wolinsky.

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