This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Kayne Anderson's CEO Discusses Q2 2012 Results - Earnings Call Transcript

While MLPs have performed quite well over the past six to seven weeks, we continue to find MLP valuations quite compelling. Currently, MLPs have an average yield of 6.1% and a distribution growth forecasted at 7% over the next year. With yield plus growth or y plus g prospects in the low double digits, we think MLPs compared very favorable relative to other equity investment alternative.

Relative to other income alternatives, MLPs are trading at higher than normal yield. The 10-year U.S. Treasury is trading at a yield of 1.5% and the yield spread to MLP is 460 basis points. This compares to the historical average closer to 220 basis points.

Relative to other income producing equity securities such as REITs and utilities, MLPs traded yield spreads at 270 and 250 basis points respectively, despite having much stronger historical and projected growth rates.

MLP distribution growth remained strong during the quarter with 41 MLPs increasing distributions, compared to 35 in the prior quarter. The average distribution increase was 6.4% on an annualized basis, which was the same level as we saw in the prior quarter.

Distribution announcements for the second calendar quarter have just begun but all signs point towards a continuation of the distribution growth. Based on our research, we continue to expect that midstream MLPs will increase their distributions by 7% in calendar 2012.

M&A activity in the MLP space continued to accelerate during the quarter with 31 announced transactions. Like last quarter, there were several very large transactions including Energy Transfer’s acquisition of Sunoco for $5.3 billion, Williams $2.5 billion acquisition of Caiman Energy, Suburban’s purchase of Inergy’s Propane operations for $1.8 billion and Penn Virginia’s $1.0 billion purchase of Chief’s Marcellus gathering assets.

Read the rest of this transcript for free on

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community


Chart of I:DJI
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASDAQ 4,776.5080 -51.8170 -1.07%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs