Investing in master limited partnerships (MLPs) offers investors the tax benefits of limited partnerships, as well as the liquidity and trading ease of publicly traded securities. However, which MLP stocks have performed best most recently?
MLPs issue units that are publicly traded on security exchanges like stocks. MLPs have two types of partners. General partners own the company and manage the daily operations of the partnership. Limited partners buy partnership units to provide the capital for the partnership’s business operations.
The list of MLP stocks below includes equities with high yields and long records of rising distributions, which offer substantial total returns on unitholders’ investment over extended time horizons.
Over the past year, these seven MLPs delivered distributions yields in excess of 3.4%, which combined with unit price gains for total one-year returns of more than 33%. Sorted in ascending order by their respective total return, below are the seven MLP stocks with market capitalizations of at least $1 billion that performed best over the past 12 months.
7 MLPs with Best One-Year Returns: #7
Landmark Infrastructure Partners LP (NASDAQ:LMRK)
Based in El Segundo, California, and formed in 2010, Landmark Infrastructure Partners LP acquires, develops, owns and manages a portfolio of real property interests and infrastructure assets in the United States. The company leases its real property interests and infrastructure assets to companies operating in the wireless communication, outdoor advertising and renewable power generation industries. The MLP also owns various interests in receivables associated with related assets. Landmark Infrastructure Partners GP LLC serves as the general partner of the company.
Landmark Infrastructure Partners increased its total annual distribution amount almost 40% just over the past five years. This advancement corresponds to an average annual distribution growth rate of nearly 7% per year. The current $0.3675 quarterly distribution is equivalent to a $1.47 annualized amount and yields 8.55%.
The unit price experienced a higher degree of volatility over the past five years, which included a 43% decline during 2018. However, since the beginning of 2019, the unit price advanced 62% to regain more than 80% of its 2018 losses and is trending upward. Over the trailing 12-month period, unit price gains of more than 21% and distributions combined for a 33.4% total return. The unit price pullback in 2018, limited the total returns over the last three and five years to 38% and 42%, respectively’
7 MLPs with Best One-Year Returns: #6
Enviva Partners L.P. (NYSE:EVA)
Based in Bethesda, Maryland, and founded in 2013, Enviva produces and supplies utility-grade wood pellets that are used as fuel for large-scale electric power generators that are operated by utility companies in the United Kingdom and in other European markets.
Enviva has boosted its distribution payout every quarter for the past 18 consecutive periods. Since its formation in mid-2015, Enviva Partners nearly tripled its distribution amount. This advancement corresponds to an average distribution growth rate of 6% each quarter or more than 26% per year. The most recent $0.675 quarterly payout amount was equivalent to a $2.70 annualized total payout and a 6.92% forward dividend yield.
Additionally, the rising distributions combined with robust asset appreciation to reward unitholders with total returns in excess of 39% just over the trailing 12-month period. Over the past three years investors enjoyed a 65% total return. Finally, unitholders more than doubled their investment with a total return of 126% since the MLPs formation in mid-2015.
7 MLPs with Best One-Year Returns: #5
Brookfield Infrastructure Partners LP (NYSE:BIP)
Based in Hamilton, Bermuda, and founded in 2007, Brookfield Infrastructure Partners L.P. — a subsidiary of Brookfield Asset Management Inc. — owns and operates various utilities, transport, energy and data infrastructure businesses. The company’s assets include natural gas transportation pipelines in Brazil and electricity transmission lines in North and South America, as well as transportation, storage and handling services for freight, bulk commodities and passengers in Western Australia. Additionally, the company owns and operates rail and motorways in South America and India, as well as 37 port terminals in North America, the United Kingdom, Australia and Europe.
The company boosted its previous $0.5025 quarterly payout nearly 7% to $0.5375 for the upcoming distribution in late March 2020. Since beginning distribution payments in 2008, the company has boosted its annual payout every year. Over the past 12 years, the company enhanced its annual distribution nearly 260%, which is equivalent to an 11.2% average annual growth rate.
The unit price maintained pace with the rising distribution and the two metrics combined from a 43% total return just in the last 12 months. Over the past three years, the combined total return was more than 70%. Lastly, Brookfield Infrastructure apartments more than doubled their investment with a total return of 108% over the last five years.
7 MLPs with Best One-Year Returns: #4
Compass Diversified Holdings (NYSE:CODI)
Based in Westport, Connecticut, and founded in 2005, Compass Diversified Holdings LLC is a private equity firm specializing in acquisitions, buyouts, industry consolidation, recapitalization and middle market investments. The company focuses on investing in niche industrial or branded consumer companies, manufacturing, distribution, consumer products, business services sector, safety & security, electronic components and foodservice.
The company currently pays a $0.36 quarterly distribution, which corresponds to a $1.44 annualized payout. At the current unit price level of approximately $23, the annual distribution corresponds to a 6.2% forward yield.
The unit price fluctuated slightly and traded flat between February 2015 and October 2018, before dropping 25% toward its five-year low in December 2018. However, the unit price has reversed direction and has nearly doubled since the five-year low at the end of 2018.
Just over the trailing 12-month period, the unit price advanced nearly 50%. This rapid growth and the income distribution that yields more than 6% combined for a 6% total return over the last year. Over the past three years, the total return was slightly higher at 62.4%. Also, the five-year total return is approaching 85%.
7 MLPs with Best One-Year Returns: #3
Apollo Global Management, Inc. (NYSE:APO)
Headquartered in New York City and founded in 1990, Apollo Global Management, Inc. provides investment management services to endowment and sovereign wealth funds, as well as other institutional and individual investors. The firm launches and manages hedge, real estate funds and private equity funds for its clients.
The current $0.89 quarterly distribution is equivalent to a $3.56 annual distribution and a 7.7% forward yield. While fluctuating between periods, the annual distributions have been trending higher over the past decade.
After losing more than one-third of its value in 2018, the unit price reversed direction and has doubled since its three-year low in December 2018. This three-year low was at the same level as the unit price five years ago. Therefore, while the share price doubled over the past five years, more than 70% of those gains occurred in the trailing one-year period. Total returns from asset appreciation and income distributions exceeded 61% over the last 12 months. Furthermore, investors more than doubled their investment with total returns of 123% and 137% over the last three and five years, respectively.
7 MLPs with Best One-Year Returns: #2
Pope Resources L.P. (NASDAQ:POPE)
Headquartered in Poulsbo, Washington, and organized as a partnership in 1985, Pope Resources manages timber resources. The company grows, manages, harvests and markets timber from 120,000 acres of directly owned land in Washington, as well as private equity timber funds’ 134,000 acres of additional land in Washington, Oregon and California. Additionally, the company also engages in commercial thinning operations, leasing ground for cellular communication towers, gravel mines, quarry operations and land use permits. Pope Resources also operates a portfolio of approximately 2,000 acres in the west Puget Sound region of Washington.
The partnership’s unit price traded relatively flat between 2015 and late 2019. However, the price has surged significantly since October 2019. While delivering total gains of 85% over the past five years, nearly 90% of those gains occurred during the trailing 12-month period.
After cutting its total annual distribution 56% in 2009, the MLP resumed its annual dividend hikes in 2011. Over the past decade, the total annual distribution amount increased nearly six-fold, which corresponds to an average annual growth rate of 19%. The current $1.00 quarterly distribution is equivalent to a $4.00 annual payout and a 3.43% forward yield.
The combined total return from the steadily rising income distributions and the unit price surge exceeded 72% over the last year. The total returns were in excess of 83% over the three-year period and nearly 111% over the past five years.
7 MLPs with Best One-Year Returns: #1
Brookfield Renewable Partners LP (NYSE:BEP)
Brookfield Renewable Partners L.P. owns a portfolio of renewable power generating facilities. Hydropower facilities comprise approximately 75% of the company’s portfolio and make Brookfield Renewable Partners a global leader in hydroelectric power production.
Brookfield increased its total annual payouts 60% since introducing dividend distributions in 2012. That advancement is equivalent to a 5.9% average growth rate over the last eight years. The upcoming $0.543 quarterly distribution is 5.4% higher the most recent $0.515 payout. This new payout amount corresponds to a $2.17 annualized distribution and currently yields 4.1%.
Despite gaining more than 60% over the past five years, the unit price traded relatively flat for the first four years of that five-year period. With two significant pullbacks in 2015 and 2018, the share price began 2019 from its three-year low of nearly $25. Since the beginning of 2019, the unit price has more than doubled, as well as advanced 85% over the trailing 12-month period. This robust gain combined with distributions for a total return of more than 92% over the past year. The unit price pullbacks in 2015 and 2018 held total returns flat over the last three and five years at 10.3%.
Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.