CVR Refining Hitting On All Dividend Paying Cylinders To Start 2013
Mar 14 2013, 11:30 | 15 comments | about: CVRR
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…)
The recent IPO’s of three MLP organized refining companies could not have been better timed. In the central U.S., normal range crack spreads have widened to the point that the LP companies are producing enough cash flow to pass 20% plus distribution rate through to investors. The latest IPO was CVR Refining LP (CVRR), which went public on January 23, 2013. CVR Refining has now published guidance for the year with a distribution projection knocking at the door of a 20% yield.
Note: MLP companies such as Calumet Specialty Products have units and pay distributions. The words stock, shares and dividends may be used here with the understanding that the rules of MLP units apply including the tax consequences of investing in MLP units.
Less than a month ago I wrote Year Of The Refiner For Income Investors to give Seeking Alpha readers a heads-up on the potential of the three new refining MLPs. Since then CVRR is up 3.7%, Northern Tier Energy LP (NTI) has gained 4.1% and Alon USA Partners LP (ALDW) has dropped by 6.6%. The S&P 500 has added 2.2% during the same time frame. Although CVR Refining popped by 6% this week with the release of the year-end financials, the market has not yet realized the level of distributions these LP stocks can pay.
via CVR Refining Hitting On All Dividend Paying Cylinders To Start 2013 – Seeking Alpha.