A 9% Yield, 11 Straight Hikes, No K-1, Big Quarterly Growth Again

Are you allergic to K-1s? Or maybe your accountant is? There are pluses and minuses associated with traditional LP tax reporting, with one of the big pluses being tax sheltering/deferral on your distributions. This GP will merge with its yieldco in June - unitholder vote due on 6/26/18. The GP yields 8.96%, and management raised quarterly payout by 37% as part of upcoming merger. GP has 11 straight distribution hikes, and yieldco has 19, with very strong 1.3x coverage. GP has received multiple upward earnings estimate revisions over the past month.

Tallgrass Energy GP LP (TEGP) is the parent/GP of yieldco Tallgrass Energy Partners LP (TEP) and has interests in a group of energy-related entities. On 3/26/18, TEGP announced a merger with TEP, in which TEP unitholders will receive two TEGP units for each TEP unit they own. The newly formed company will be known as Tallgrass Energy LP, which will trade on the NYSE under the ticker "TGE." The new entity will be taxed as a C-Corp, which eliminates K-1 hassles for investors, and management feels that the new structure will give the combined companies broader market exposure.

Source: Seeking Alpha

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