While midstream earnings ramp up next week, many announcements of second-quarter distributions have already surfaced.
Half of the companies in the Alerian MLP Infrastructure Index (AMZI), tracked by the Alerian MLP ETF (AMLP ), have declared distributions for the second quarter. AMZI is a capped, float-adjusted, capitalization-weighted composite of energy infrastructure MLPs. Included names earn most of their cash flow from midstream activities.
To be clear, second-quarter distributions refer to distributions paid during the third quarter based on operational performance in the second quarter.
Midstream Names Growing or Maintaining Distributions
Of the constituents in AMZI that have announced distributions, there have been zero cuts. As of July 24, two constituents are growing their payouts, while five are maintaining.
The MLPs that grew distributions for the second quarter include Enterprise Products Partners (EPD) and Global Partners LP (GLP). The two names make up nearly 14% of AMZI by weight, as of July 23.
See more: Key Differences Between MLP Distributions & Corporate Dividends
Enterprise on July 10 announced a quarterly distribution of $0.525 per unit for the second quarter. This represents an increase of 1.9% over the first quarter of 2024, and a 5.0% increase compared to the second quarter of 2023.
Global Partners on July 24 announced a second-quarter distribution of $0.7200 per unit. This amounts to a 1.4% increase from the distribution for the first quarter of 2024, and a 6.7% increase from the second quarter of 2023.
The midstream players that have announced they will be maintaining distributions include Plains All American (PAA) and Western Midstream Partners (WES), the two largest names in AMZI by weight.
Additionally, EnLink Midstream (ENLC), USA Compression Partners LP (USAC), and Genesis Energy LP (GEL) each said they would maintain their payouts.
While Western Midstream is maintaining its distribution for this quarter, the company notably raised its quarterly distribution by 52% to $0.8750 per unit for the first quarter (payable during Q2).
See more: 1Q24 Midstream/MLP Dividends: Growth Story Intact
As of the end of the first quarter, 88.2% of names in the AMZI by weighting had grown payouts over the past year.
Investor Interest in MLP ETF ‘AMLP’
Many investors are attracted to the midstream space as the segment continues to offer generous income and attractive returns.
AMLP, the $9.2 billion ETF tracking AMZI, increased its distribution by 14% in 2023 compared to the year prior.
The fund has seen sizable flows in recent weeks and months. As of July 23, AMLP has accreted $211 million in net flows over a one-month period. Year to date through July 23, it has taken in $717 million.
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