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.

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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.

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