The partnership has returned 25.8% over the past twelve months. Analysts’ five-year annual growth estimate is 12.2%, the company’s PE is 21.9, and its dividend-payout ratio is 93%.
Enterprise Products Partners L.P. (NYSE:EPD) still scores very well on my ratings system, with an increase to 19 points since I selected it. I am very pleased with its inclusion in my portfolio.
The third MLP on Mr. Reeves’ list is Plains All American Pipeline, L.P. (NYSE:PAA), which I have examined several times but have chosen not to include in my portfolio at this time.
The company is currently trading at approximately $58, it yields 3.90%, and it has been raising its dividend for 13 years. Its last increase was in the current quarter, when it was raised to $0.57, an increase of 2.2%. Like Enterprise, Plains All American Pipeline, L.P. (NYSE:PAA) raised its distribution every quarter last year and twice so far this year, and its five-year DGR is 5.5%.
The partnership has returned 49.8% over the past twelve months. Analysts’ five-year annual growth estimate is 26.2%, the company’s PE is 18.3, and its dividend payout ratio is 70%.
Plains All American Pipeline, L.P. (NYSE:PAA) is actually scoring higher now than it has the last couple of times that I checked — in the past it had scored 17, but today it scores a 19, which would be enough to qualify for my portfolio if I were still looking to add companies. Which right now, I am not.
I do have another MLP in my portfolio; it is Sunoco Logistics Partners L.P. (NYSE:SXL), which I added to the portfolio in April with a score of 18. You can see my analysis here, and I re-scored it as well; it scores a 20 today.
I’ve prepared a chart to show how each MLP scores:
| Years | Yield | DGR | EGR | Payout | Total Return | PE | TOTAL | |
|---|---|---|---|---|---|---|---|---|
| CQP | 0 | 4 | 0 | 4 | 1 | 2 | 0 | 11 |
| EPD | 3 | 4 | 1 | 3 | 2 | 2 | 4 | 19 |
| PAA | 2 | 3 | 1 | 4 | 3 | 4 | 2 | 19 |
| SXL | 1 | 3 | 4 | 4 | 1 | 4 | 3 | 20 |
In conclusion, while I do agree with Mr. Reeves that MLPs are a terrific way to add income to your portfolio, I disagree with which three are the best. I would choose Enterprise Products Partners L.P. (NYSE:EPD), Plains All American Pipeline, L.P. (NYSE:PAA), and Sunoco Logistics Partners L.P. (NYSE:SXL).
The article Do You Want These 3 “Superior” MLPs for Your Dividend Portfolio? originally appeared on Fool.com and is written by Karin Hernandez.
Karin Hernandez has long positions in Enterprise Products Partners and Sunoco Logistics Partners. The Motley Fool recommends Enterprise Products Partners L.P. Karin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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