Under-the-Radar Energy Stocks for Today

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Buckeye Partners(BPL Quote) and NuStar Energy(NS Quote) are limited partnerships, giving investors tax advantages that become more attractive as the price of crude oil rises.

Cash distributions are paid out tax-free, and only the sale of shares prompts a tax bill from Uncle Sam. Baby boomers, in particular, should take note.

Oil is hovering near a six-month high, trading at about $60 a barrel. Still, prices peaked last July at almost $150 a barrel.

Only 35 of 391, or 9%, of energy stocks covered by TheStreet.com Ratings earn "buy" recommendations. Regardless of whether oil rises or falls in the short term, Buckeye Partners and NuStar Energy have stable business volumes, wide margins and yields above 8%, beating those of Chevron(CVX Quote), Exxon Mobil(XOM Quote), British Petroleum(BP Quote) and ConocoPhillips(COP Quote).

Pennsylvania-based Buckeye Partners transports and stores fuel for major oil companies. It yields 8.5% -- an incredibly attractive investment for investors seeking income and tax deferral.

The company's first-quarter revenue rose 10% to $417 million, and earnings per share increased 18%. Rivals simply couldn't keep up, as the oil and gas storage and transportation industry has suffered from lower crude-oil prices and weak demand stemming from the global recession. However, Buckeye Partners holds more than $1.4 billion in debt and just $17 million in cash.

Shares of Buckeye Partners are trading at a slight discount based on earnings, with a price-to-earnings ratio of 12.84, compared with the peer average of 14. The stock has risen 31% this year, has a market value of about $2 billion and a beta of 0.05, indicating low market correlation. (A perfect correlation is 1.) The benchmark S&P 500 index has eked out a 2% gain so far in 2009. Moreover, Buckeye Partners has a history of regularly increasing cash distributions, even in times of economic duress.