Martin Midstream Partners L.P. (MMLP), Kinder Morgan Energy Partners LP (KMP): A High-Yielding Energy Company for Income Investors

The second recent deal was announced just last week, when the partnership announced it would acquire six liquefied petroleum gas pressure barges and two commercial push boats from Florida Marine Transporters for $50.8 million. Martin picked up these assets to increase its ability to handle natural gas liquids. It has its sights set squarely on the Eagle Ford shale, where NGL production is growing by leaps and bounds.

The growth of the Eagle Ford, and domestic energy production in general, is in fact driving favorable activity in the Gulf of Mexico. Refined petroleum exports are up, and crude oil — or slightly refined crude oil — supplies are being moved via boat or barge all over the Gulf, up the Mississippi River, and even around to the East Coast and Canada.

Earlier this year, Valero Energy Corporation (NYSE:VLO) received special permission to export crude to one of its refineries in Canada. This is the exact sort of activity that should boost Martin’s marine segment, and these two acquisitions put the partnership in an excellent position to exploit the macro trend.

Foolish takeaway
Martin Midstream Partners L.P. (NASDAQ:MMLP) has generated a 12% total return over the last 12 months, but I think its best days are ahead. The partnership boasts an extremely high yield, but does not raise its distribution every quarter. That sort of fiscal responsibility is refreshing, but so is knowing that — unlike industry peer Energy Transfer Partners LP (NYSE:ETP) — ultimately the dividend will climb. While I like the future outlook for the sulfur and marine transportation services segments, management also has high hopes for the terminals and storage business, based on the booming activity on the Gulf Coast. Martin Midstream’s commitment to pursuing fee-based revenue in a high-activity region like the Eagle Ford Shale means that we may see another distribution increase sooner rather than later.

The article A High-Yielding Energy Company for Income Investors originally appeared on Fool.com.

Fool contributor Aimee Duffy has no position in any stocks mentioned. Click here to see her holdings and a short bio. If you have the energy, follow her on Twitter, where she goes by @TMFDuffy. The Motley Fool has no position in any of the stocks mentioned.

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