Plains All American Pipeline, L.P. (PAA) is among the larger master limited partnerships, being a candidate for a core holding for investors looking to increase their exposure to MLPs, an asset class benefiting from low interest rates and investor desire for yield, as well as the growing demand for energy infrastructure in North America, says Gregory A. Reid, Managing Director at Salient Partners, L.P.
“Among the larger-cap companies that we have larger positions in, here in Houston we have Plains All American Pipeline,” Reid said. “We view Plains as a very solid core holding. The yield is around 4% today, and we expect to see about 8% to 10% growth out of that company in the next several years annually, so that would be something that would be a core holding.”
FOR MORE INFORMATION ABOUT THIS INTERVIEW CLICK HERE.
Although PAA does not offer the highest total return among MLPs, Reid says this stock can act as an appropriate part of a balanced portfolio that has exposure to the tailwinds affecting this sector.
“You are probably not going to have as high a return on Plains because it is fairly low yielding — less than 4% today is a fairly low yield on that security — but something we feel would be an appropriate core holding. It is a pretty large part of the index as well, the Alerian MLP Index; I think it’s around 6.5% of the index currently,” Reid said.
Plains All American Pipeline, L.P. (PAA) Has 15% Total-Return Potential, Sees Growth in Permian Basin and Bakken Shale
March 22, 2013
Plains All American Pipeline, L.P. (PAA) Well-Positioned for Cash Flow Growth and 10% Distribution Growth
March 28, 2014
Plains All American Pipeline, L.P. (PAA)’s Organic Growth Projects Yield Expectations of Up to 10% Distribution CAGR
March 26, 2013
Plains All American Pipeline, L.P. (PAA) Provides Infrastructure for Growing U.S. Oil Production
April 08, 2013
Plains All American Pipeline, L.P. (PAA) Likely to be Acquisitive in Current Environment
March 27, 2015
