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Comments on Teppco Partners, another MLP



June 24, 2009 – Comments (0) | RELATED TICKERS: TPP.DL2

I used to own Teppco Partners (TPP), another energy master limited partnership. I was attracted by the income stream and I felt its gas transport assets had a wide moat.

I sold to take profits and reinvest them elsewhere. As prices in the MLP sector crashed, though, I didn't think to reinvest in Teppco. I was not pleased that they'd diversified into other areas, like water transport, where the economics aren't quite as favorable.  This wouldn't have been a dealbreaker. However, dividend growth has come in at only 3.5% or so over the last 3 years. That's completely unacceptable. Dividend growth is the main reason to own MLPs.

I wouldn't lose sleep if I were given restricted units in Teppco, for whatever reason. However, there are other MLPs and general partners I prefer. I've always been pounding the table on Enterprise GP holdings (EPE), which owns a stake in Teppco's GP. EPE benefits from a bit of a portfolio effect in its three companies, so I feel completely comfortable holding it. My newest MLP holding is Kinder Morgan Management (KMR, which is the S-Corp version of KMP; I discussed it in my last post). 

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