Linn Energy LLC (LINE), SandRidge Energy Inc. (SD) Among The Three Companies I’m Watching Closely This Earnings Season

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While earnings season kicked off earlier this month, the floodgate of reports will really begin to hit the wires over the next couple of weeks. With so much news and so little time you really need to have a plan. I have three companies on my list that merit my attention.

SandRidge (SD)

Buckeye Partners, L.P. (NYSE:BPL)
Earlier this month I participated in a Motley Fool roundtable discussion and made Buckeye my top pick. Needless to say, my reputation is at risk if Buckeye turns out to be a quick bust. While a poor earnings report could make that happen, that’s not what has my attention.

When I made Buckeye Partners, L.P. (NYSE:BPL) my one MLP to buy, I saw a company that should soon have the ability to begin to raise its distribution to investors. This is a company that just last year broke a streak of 30 consecutive quarterly distribution increases. After five straight static distributions, the company could raise its distribution when it reports earnings.

Over the past two years Buckeye Partners, L.P. (NYSE:BPL) has aggressively expanded by announcing more than $2 billion in acquisitions while spending another half billion on organic growth projects. Buckeye has another $330 million in organic growth projects already in the works this year, and is likely to announce another acquisition before the year is out. This growth is geared to generate extra cash flow, which should put Buckeye in the position to raise its distribution soon.

Investors in LINN energy are no strangers to the role acquisitions play in giving the company the ability to raise its distribution. Along with its announced acquisition of Berry Petroleum Company (NYSE:BRY) in conjunction with its affiliate LinnCo LLC (NASDAQ:LNCO) earlier this year, LINN announced a sizable boost to its distribution. While I wouldn’t expect to see any mention of another dividend increase this quarter, what we might see is confirmation that the company is switching to a monthly distribution.

This move won’t alter the intrinsic value of the company but it could make it much more attractive to investors. Higher-valued units could make them a better currency for future acquisitions, which would add value. We should know more when Linn Energy LLC (NASDAQ:LINE) reports earnings on April 25.

SandRidge Energy Inc. (NYSE:SD)
One thing I won’t be watching for at SandRidge is any notion of a dividend. The oil and gas exploration company is in the midst of a major growth phase thanks to its prime position in the Mississippi Lime formation. It’s already announced plans to spend more than $1.2 billion this year to further develop the play.

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