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Thursday, January 20, 2011


MLPS took it on the chin yesterday with an almost 5 point loss on the index. You know there is trouble when you get good news and the stock goes down. Oneok (OKS) upped its earnings and distribution guidance for 2011 and the stock traded down. Oneok also upped its distribution. After the close yesterday Natural Resource Partners (NRP) announced decent guidance but the stock is bidding lower in the pre market by at least a buck. Reading through the guidance i noticed the company says that DCF is forecast to be at the midpoint of 1.35 to 1.75 per unit. But the MLP is payout $2.16 annual. Doesn't sound to me like its a good idea to payout more than your taking in. But i will dig around to see why the disparity. Under a normal payout ratio of 90%, the distribution should be in a range of say 1.20 to 1.40 annual. Maybe there is something else going on here but before buying (or selling) that is a question that needs answered. Also the company points out there will be no increase in production this year due to a delay in a mine coming on line.

Elsewhere here is my favorite distribution hike. Suburban Propane (SPH) hikes for the 19th straight quarter from 85 cents to....drumroll please.....0.8525!!! That is a distribution hike of one quarter of one cent. Please unitholders don't spend it all in one place. And of course we have the usual earnings report and distribution hike from granddaddy of mlp's Kinder Morgan (KMP).

This morning stock futures are lower as we are showing some additional selling after yesterday. The S&P and the overall market was much weaker than the dow industrials thanks to IBM's distortion among others. Rates are a little higher this morning ahead of economic reports this morning. Crude is down. Nat gas had a good day yesterday as it keeps attempting that upside breakout.

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