Alerian MLP ETF (AMLP)

Energy tends to be a late cycle participant. The pipes and midstream companies have a good yield and there is capacity constraints in the US Permian area that will create good tailwinds for this. Yield 7.5%.

He is positive on energy generally. Pipelines are capacity constrained, which gives them some pricing power. This is an expensive ETF and it pays a conservative level of return but he thinks the pricing pressure creates an attractive opportunity for the next couple of years. (Analysts’ price target was not provided)

It is not unlike a REIT but for pipelines in the US. They put it into this MLP structure. It is a basket of pipeline stocks. The revenue gets passed on to the shareholder. It is not a Canadian dividend, however, so not taxed the same way. He thinks you are in a trading range environment now. He has been buying on weakness.

Is the 8% dividend sustainable, and is there any upside to the ETF? This is an energy ETF, so you want to think about this like you think about the Enbridge Income Fund. He doesn’t think the 8% is sustainable. Performance has been so-so, mainly because oil prices have slipped quite dramatically. There will be some challenges in the next few years.

Energy infrastructure and pipelines. They wrap up tax reporting into a single figure. That is the attraction. You are less likely to see volume growth with oil where it is. This is going to be an income name only, no growth.

A basket of midstream and infrastructure energy names. Pays about a 9% dividend yield. Has gotten beaten up quite dramatically, but has started to recover from its February lows. If you think the energy sector is recovering and stabilizing, this might be a good name to hold for income and capital appreciation.

Current yeild is 5.8%. Is a great ETF. Start worrying if interest rates start moving up, which he doesn't think will happen anytime soon.