For the dividend guys out there...also an energy play... check out MMP.. Pays a 10% annual dividend ... not gonna be a casino stock but should be stable at least
here's part of an article from a couple weeks ago:
Magellan Midstream Partners (MMP) is in a category of its own. It has by far the best capital-allocation record in the industry — a higher return on capital and the least (almost no) share issuance. MMP focuses on transmitting refined products (gasoline, diesel, jet fuel). It has little competition in its pipeline routes and is often a sole supplier. The beauty of the pipeline business, if it is run properly, is that it is mainly a fee-for-service business where the supplier often guarantees minimum revenues.
One concern we had with MMP was electric cars: They don’t run on gasoline. We did a lot of modeling and realized that it will take a long time before gasoline goes away. Even if sales of electric cars increase, which we think they will, the number of gasoline cars on the roads will remain stubbornly high for a long time. Electric semi-trucks are a decade behind electric cars, and airplanes are behind semi-trucks. Also, as demand for gasoline declines, pipelines will be able to raise prices (like cigarette companies are doing today).
As of this writing MMP is a $41 stock or so. It is earning about $4 today and should earn about $5.50 in 2024. It pays about $4 a share of dividends. As things come back to post-pandemic normal and its free cash flows grow, the company will either buy back stock or increase its dividend. Over the next four years we will collect at least $16 of dividends.
MMP should be trading at least at 15x earnings or $75. It was in the low $60s at the beginning of 2020 (and the 2017 high was $80). We’d argue that high, sustainable, growing dividend payments are more valuable in a near-zero (during and post pandemic) interest rate environment. Combine this with dividends, and MMP is worth around $91 to us. The stock finished trading on Feb. 19 at $41.49.
