Plains All American Pipeline, L.P. (NYSE: PAA). is Currently a Bargain

Midstream energy companies or, more specifically, master limited partnerships (MLPs) — which generate their revenue from the transportation and/or storage of energy sources, like crude oil, natural gas and natural gas liquids (NGLs) — are an interesting sub-industry to analyze.

To be clear, this group’s enticing argument to investors goes beyond the high yields with which MLPs are typically associated.

They’re characterized by considerably high barriers to entry for competitors, stemming from a tough regulatory approval process and the demand for large amounts of capital.

As a result, distribution of the market share is skewed. Of the 45 companies operating as midstream MLPs, the top seven collected nearly 75% of the industry’s total revenue.  (more)

Please share this article