As pipeline MLPs go, the combined company will remain well in the middle of the pack as far as size goes. The largest MLP is Enterprise Products Partners L.P. (NYSE: EPD), with a market cap of more than $54 billion. Crestwood, before the merger, is one of the smallest MLPs, with a market cap of just $1.22 billion.
Size really matters to a pipeline MLP. The firms need constant growth in order to fund quarterly distributions to unitholders, and mergers are a key method of growth. Building new pipelines can be an arduous undertaking (see, for example, TransCanada Corp. (NYSE: TRP) and the Keystone XL pipeline).
In addition to Enterprise Products at least six other MLPs check in with market caps above $10 billion:
- Kinder Morgan Energy Partners L.P. (NYSE: KMP), $33.26 billion
- Williams Partners L.P. (NYSE: WPZ), $20.41 billion
- Plains All American Pipeline L.P. (NYSE: PAA), $19.31 billion
- Energy Transfer Partners L.P. (NYSE: ETP), $14.31 billion
- Magellan Midstream Partners L.P. (NYSE: MMP), $11.63 billion
- Oneok Partners L.P. (NYSE: OKS), $11.34 billion
The newly merged company will be larger than some established MLPs though:
- Sunoco Logistics Partners L.P. (NYSE: SXL), $6.26 billion
- Targa Resources Partners L.P. (NYSE: NGLS)
- NuStar Energy L.P. (NYSE: NS), $3.84 billion
- Holly Energy Partners L.P. (NYSE: HEP), $2.1 billion
Prior to the announced merger, Crestwood paid a quarterly distribution of $0.51 and Inergy Midstream paid $0.395. Inergy LP paid $0.29 a quarter. The combined company won’t pay the sum of that, but it’s possible that the new company can approach the $0.67 a quarter paid out by Enterprise. Crestwood’s current distribution is already close to Plains’ $0.575.
Shares of Crestwood are up 4.8%, at $25.00 in a 52-week range of $19.90 to $29.12.
Shares of Inergy Midstream are down 4.8%, at $23.00 in a 52-week range of $18.31 to $26.01.
Shares of Inergy are up 8.5% to $23.89, after posting a new 52-week high of $24.64 earlier today. The 52-week low is $16.40.
The Average American Is Losing Their Savings Every Day (Sponsor)
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4% today, and inflation is much higher. Checking accounts are even worse.
Every day you don’t move to a high-yield savings account that beats inflation, you lose more and more value.
But there is good news. To win qualified customers, some accounts are paying 9-10x this national average. That’s an incredible way to keep your money safe, and get paid at the same time. Our top pick for high yield savings accounts includes other one time cash bonuses, and is FDIC insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes and your money could be working for you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
