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Robert Parisi
Nov 20, 2019 6:52PM ET
Magellan has been among the best deliverers of increasing distributions with 71 consecutive quarterly increases. It is an oil only Midstream MLP with a growing presence in the Permian basin and is partnering with Valero for Exporting refined oil products. 1 more big plus here, this investment grade MLP is both self-funding and free of dilution since they bought out their General Partner interests including IDRs in 2010.
Like others in its sector, with Enterprise (EPD) coming to mind immediately, MMP trades in predictable but narrow cycles. This allows buying under $60 and reducing via trading as it rises past $67-68. With EPD, one has the opportunity to buy in the bottom of their cycle, under $25 per unit, and HOLD until the units move up toward $29-30.
After ~10% unit price gains one can sell "Covered Calls" "closer to the money", with commissions of around 3-6%. In my experience these options are picked up about 1/2 of the time which allows investors the options to HOLD or Sell.
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