GLP (Master Limited Partnership)

I received this in an email about energy high-paying dividend stocks. GLP may be an interesting ticker for the divided yield.

$5 Gasoline ~ What Now? GLP>4.59
April 12th, 2011 by Rich

Now, reviewing our favorite and frequently mentioned accumulation XOM, we found a closely-held MLP (Master Limited Partnership) XOM Gasoline Station spin-off above 4.59 with a 7+% dividend that is targeting 50.5.

It seems two years ago XOM decided the 2% margins on retail fuel stations were not boosting its 29% margins, so over 2200 gas stations were spun off as gasoline prices peaked out around $4 a gallon. The stations still retain their Exxon Tiger and Mobil Red Horse branding and fuel, along with any convenience store or mechanic bay repair sales.

One XOM station purchaser was a Master Limited Partnership holding company called Global Partners LP, a leader in the storage, distribution and marketing of gasoline, distillates and residual oil to wholesalers, retailers and commercial customers throughout the Northeast and Internationally.

GLP enjoyed Returns of Equity as high as 37% the last five years. Last year’s ROE was 12%, the lowest in five years. Despite that, GLP paid the highest dividend in five years in 2010, $1.96.

http://globalp.com/ (Website service unavailable as of writing)

GLP is a $354 M company with $7.8 B revenues last year, only 4627 shareholders, 44% of them institutional, that trades around 74,000 shares a day.

As an MLP, the MLP pays no taxes, distributes most of its profits with depreciation, and shareholders receive K-1s to file and pay taxes at their individual tax bracket rate.

http://www.ehow.com/print/about_5212918_k_1-tax-return_.html

Shareholders who bought GLP five years ago when it was a new MLP, doubled their money so far.

GLP has the second highest Investment Quotient rating for its peer group.

GLP insiders bought last November 2010 at prices from $25.22 to $26.08.

As GLP is still in that price neighborhood after margin squeezes, and we think most insiders know what they are doing, we like GLP as a total return play that could keep up with inflation and then some.

If GLP goes as low as its $4.59 low in the market crash of October 2008, it would be a lifetime Buy.

If GLP goes as low as its 200-DMA (Day Moving Average) currently around $25.17 with a 50 cent quarterly dividend, the next going ex-dividend around 1 May 2011, we also like it…

Mahalo Regards*Rich