An 8% Yield, 8 Straight Hikes, Industry Tailwinds For This Niche Industry Leading LP

If you want to heat things up at your next cocktail party, try bringing up the subject of climate change - it's sure to elicit some verbal sparring. Be that as it may, many governments are forging ahead with emissions reduction plans, particularly in Europe, the UK, and now in Asia. The yield is 7.85%, with 1.13x coverage. Management has raised distributions eight straight quarters. Strong industry demand will continue to provide steady tailwinds.

All of this legislative activity is putting pressure on large power generating utilities in these areas to come up with alternative sources of fuel. That's where Enviva Partners LP (EVA) comes in. EVA is the world's leading producer of wood pellets, a biomass item which is much sought after by foreign utilities due to increasingly demanding carbon emission laws passed in the UK, Europe, and Asia. It operates on long-term contracts, which currently have a remaining tenor of 9.8 years, with a backlog of $5.6B. EVA produces these pellets from wood scraps and various forestry products generated in the Southeastern US and is the lowest-cost producer in this niche industry.

Source: Seeking Alpha

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