5 Reasons to Love BrietBurn Energy Partners L.P. (BBEP)

5. Solid balance sheet
Because BreitBurn returns most of its income to investors, it needs to take on both debt and equity to fund its growth. It uses a blend of 60% equity and 40% debt to fund acquired assets as it seeks to maintain low leverage ratios. Right now, its total debt-to-enterprise value is just 35%. The company had just $800 million of debt even after executing on $745 million of acquisitions in the past year and a half. The company has strong liquidity and flexibility to pursue additional accretive transactions that come its way. Balance-sheet flexibility is a must in any industry, but it’s especially crucial to energy companies. Just ask Chesapeake.

My Foolish take
BreitBurn Energy is a solid company that’s unlikely to burn investors. It pays a phenomenal distribution that’s backed by stable operations, hedged production, and a solid balance sheet. There’s a lot to love with BreitBurn, especially for investors who enjoy fat quarterly paychecks.

The article 5 Reasons to Love BrietBurn Energy Partners originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo owns shares of Linn Energy. The Motley Fool has options on Chesapeake Energy.

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