TransMontaigne Partners L.P. is one of the Master Limited Partnerships (MLPs) that has tremendous income, with a distribution yielding 7.3%.
TransMontaigne Partners operates terminals, storage, transportation and related services to customers in the energy sector, including those distributing and marketing light refined petroleum products, such as gasoline, diesel and jet fuels, heavy refined petroleum products, such as asphalt, crude oil, chemicals, fertilizers and other liquid products.
The partnership is based in Denver and has operations in the Gulf Coast, the Midwest, Brownsville, TX, along the Mississippi and Ohio Rivers and in the Southeast.
In April, the partnership raised its quarterly distribution by a penny over the 2009 pay outs to 60 cents per unit, which currently is yielding 7.30%.
This yield is much higher than the industry average of 3%, which is also nothing to scoff at.
TransMontaigne Beat By 20%
On Aug 9, TransMontaigne announced results for the quarter ended June 30. Earnings per unit were 60 cents compared to the Zacks Consensus of 50 cents.
Revenue rose to $36.8 million from $35.8 million in the year ago period due to increase at the Midwest and Southeast terminals which offset a decrease in revenue at the River terminals.
After the partnership's beat in the first quarter, the analysts moved to raise 2010 estimates.
The 2010 Zacks Consensus Estimate rose 12 cents to $2.21 per unit in the last 30 days.
This is earnings growth of 11.3%.
Analysts are a little more skeptical of 2011, however, as earnings are expected to decline by 1.7%.
The MLPs have been hot stocks in the last few months as investors have been seeking out yield.
With that distribution over 7%, and a forward P/E of just 15, TransMontaigne has been attractive to investors. It is trading near its 52-week high.
TransMontaigne Partners is a Zacks #1 Rank (strong buy) stock.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.