The Dividend Hunter See A Path of Dividend Growth

03/31/2017 2:50 am EST

Focus: COMMODITIES

Tim Plaehn

Investment Research Analyst, Investors Alley

Our latest recommended stock is Plains GP Holdings LP (PAGP). After a transformative 2016, each PAGP share is now the 1099 reporting equivalent of an MLP unit of Plains All American Pipeline, LP (PAA).

Plains is the largest independent owner of crude oil infrastructure assets, including gathering systems, pipelines and storage terminals. The company's integrated system allows it to collect several tariffs on a single barrel of oil as it makes its journey from the wellhead to the refinery.

While the PAGP share price tends to move up and down with the price of crude oil, the company's business operations generate stable, fee-based revenue. At the current point in the energy production and pricing cycle, Plains can be viewed as a high quality company, with an investment grade credit rating, paying a very secure dividend that currently yields 7%. 

At some point in the future, possibly later in 2017 or into 2018, the company will again be able to resume a path of dividend growth. Buy or add shares of PAGP below $31.40 .

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