Mike Capombassis
Sunoco LP
SUN-N
COMMENT
Jun 07, 2016
Any time he sees a yield of almost 10%, it leads him to believe there is probably more risk than meets the eye. Generally, he doesn’t own energy stocks in his portfolio. He focuses on the best dividend growers looking out a year. The inherent and volatility in the energy business is just not conducive to sustainable dividend growth.
Anything they refine is just exploding. Even though oil is high, the margins they are getting on their products is expanding at a faster rate than their feed stock.
The biggest issue with this is that it is a US company. He likes energy, refineries and the sector but he is concerned about the US$. Wouldn't buy any US company right now because he feels he would lose on the currency.
The issue with this one is that it is effectively a refiner, which has been a very difficult business in the last little while. Trading at one of its cheapest multiples that it has in a long time. If you have a long-term view, it's not a bad story to own.
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Any time he sees a yield of almost 10%, it leads him to believe there is probably more risk than meets the eye. Generally, he doesn’t own energy stocks in his portfolio. He focuses on the best dividend growers looking out a year. The inherent and volatility in the energy business is just not conducive to sustainable dividend growth.