AMLP (Alerian MLP ETF) is an ETF that tracks energy infrastructure Master Limited Partnerships that earn the majority of their cash flow from midstream activities. Due to the potential for above-average growth & income potential, it will be added as an Active Growth & Income Trade around current levels.
AMLP daily Feb 12th
As an ETF, AMLP does not issue a K-1, which some investors prefer to avoid. Additionally, most brokers will allow AMLP to be purchased within retirement accounts whereas some do not allow investors to hold MLPs directly in their IRAs.
With a current dividend yield of approximately 9.67% coupled with the potentially bullish intermediate-term outlook for the energy sector, AMLP has the potential for both capital appreciation & above-average income. Although the amount of a company’s or an ETF’s dividend is subject to change, the most recent quarterly dividends over the past year on AMLP (4 previous dividends) were $0.195 per share with the next dividend scheduled to be paid out on Feb 20th to shareholders of record on Feb 14th (this Friday). Keep in mind that it is not unusual to see a security drop by the amount of the upcoming dividend on the ex-dividend date (the day after the record date) as that reflects the amount of the “built-up” dividend payment coming out of the stock, although those owning the stock on the record date will still receive the dividend, even if they sell the stock before the dividend payment date.
The price targets for this trade are T1 at 8.70 & T2 at 9.42 with a maximum suggested stop of 7.49. The suggested beta-adjusted position size for this trade is 0.90.