Buying some Pipe

By Travis Johnson, Stock Gumshoe, November 20, 2008

With the precipitous decline in natural gas, pipeline firms are again heading down — and some orders that I placed a little while ago got triggered.

I picked up shares of Boardwalk Pipeline Partners (BWP) and of Kinder Morgan Management (KMR). Both are fairly large and operate as high yield infrastructure plays, though BWP is a Master Limited Partnership (MLP) and KMR is structured as a LLC to avoid some of the tax filing headaches of MLPs. KMR’s yield is in the form of shares, BWP’s yield is in cash. Both current yield a hair over 9% annually, and should be able to maintain and slowly grow their yields as they expand their pipeline networks and, when the market (or regulators) allow, raise rates.

I’ll probably be writing more about these folks in the months ahead, but I just wanted to get the official notice in that I am now the owner of a few shares of each. If you want to read more about pipelines, I’ve written about these MLPs a few times as they were heavily teased by a few different services (one called them Reagan Stimulus Dividends and the other Bonded Trusts.

Personal Capital is an advertiser with Stock Gumshoe, but Travis also uses it every day for his personal accounts and finds it invaluable. Here's what he said: "They offer a great (and genuinely FREE) 'second opinion' for your financial plan, but what I love most is their automated financial dashboard -- it will look at all your assets and debts, tally up your asset allocation, project where you'll be at retirement, and suggest ways to manage risk or improve returns. It's free, I think their free tools are great, and I think it's worth checking out -- you can do so here.
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