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Strategies & Market Trends : Value Investing
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From: E_K_S2/3/2010 2:30:20 PM
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Started a position in DCP Midstream Partners LP (DPM) for the IRA account. PE is around 10 but forward PE is estimated to be around 18 due to sizable investments that will not generate revenue until some time in the future. The dividend yields 8% based on the current price of $30.00/share.

DCP Midstream Partners, LP engages in gathering, compressing, treating, processing, transporting, and selling natural gas. It also involves in producing, transporting, storing, and selling propane; and transporting and selling natural gas liquids (NGLs) and condensate.

It's selling close to its 52 wk high but should produce excellent income for the IRA.

The document below describes their different producing assets ranging from pipelines, NG gathering & processing facilities and NG servicing facilities. DPM is joint partners with Spectra Energy and ConcoPhillips.

snl.com

This is the only MLP in the IRA and annual income from the units purchased s/b well below the $1000.00/year UBI limitations.

My thought is that their annual distributions should track inflation and/or interest rates better than a fixed income or preferred stock holding. The company owns a lot of valuable operating assets that should increase in value over time especially if NG volume increases as projected.

EKS
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