#I PUT THIS OFF SO LNG THINKING LIKE WELL MAYBE IT CAN BE

[virtue-and-beneviolence]

(Dealbreakers event) Wait no this is fucking hilarious I want in!! Any gender is fine 🥰

Dealbreaker for me: can’t take care of themselves/their house. Can’t do their laundry, cook, clean, etc. It’s even worse if they don’t even try to negate this (eg takeout, hire a cleaner, get their clothes dry cleaned etc). Like please if I wanted to be a mother I’d have an actual child. I can barely take care of myself on a daily basis.

An ick/bad habit of mine: I am the worst to share a bed with. I either don’t move and people think I’m dead, or I will kick you out of the bed and steal the blankets. I’ve been told by numerous people that they never want to share a bed with me again because I’ve either scared the shit out of them when they’ve woken up and think I’m legit dead, or I’ve injured them in some way. Nobody sleeps well when sharing a bed with me. I also have no recollection of doing any of this when I wake up. I am truly a terror.

I can’t wait to find out who my ex is, but just know if it’s Ran I will cry but also like… why can I clearly picture it being Ran 😀

Blessed she who clearly Sees the wood for the trees... I'm beginning to notice How much this feels like A waking limb Pins and needles

ʏᴏᴜʀ ᴅᴇᴀʟʙʀᴇᴀᴋᴇʀ ᴇx ɪs…

ʀᴀɴ ʜᴀɪᴛᴀɴɪ

Oh babe. I'm so sorry. I know how much you love him. I do. I do! But don't you think it's worth leaving if you're having this hard of a time? I keep hearing from you just what a mess the man is. The cleaner was a cop out but at least it was a welcome change. But still, what is this the 50s? Why are you cooking every night for a man that doesn't even pick up his socks? Plus! Plus, you're always telling me how insufferably grumpy he is that you keep him from getting his precious sleep. It's not like you can just snap your fingers and fix that! And we are not even discussing his suggestion of sleeping pills, I'll get too fucking angry. Look a relationship shouldn't be all give and no take. You shouldn't feel numb when you're around him. Maybe take some time off dating for a while.

ℬ𝒶𝒿𝒾 𝒦𝑒𝒾𝓈𝓊𝓀𝑒

Take your time mourning your time with Ran. But I really think you and Baji could be cute! That certified mama's boy may not seem like it, but he knows his way around a kitchen a bit. And he's a big teddy bear that tosses and turns in his deep sleep anyway. I don't think you could possibly bother him. He'd probably bear hug you if you accidently punch him or something.

[commonsensewizard]

The Chicken Littles Chortle Too Much!

Franklin Delano Roosevelt sat with one of the greatest mass murderers and enemies to this country we have ever seen in Josef Stalin and allied with him. John F. Kennedy had a hot line to Nikita Khrushchev in the Oval Office where they could speak to each other one on one in private. Jimmy Carter lessened his criticisms of Soviet civil rights abuses under Leonid Brezhnev for continuation of the SALT II talks. Reagan met with Gorbachev several times. Every president since World War II has done everything possible to keep our two countries from obliterating each other. Even Obama, the Bush’s, and Clinton. Hell, Hillary Clinton, Secretary of State, was all giggly when she handed the Russians a freaking ‘Re-Set’ button to supposedly help normalize relations and the media was all for it. Yet, there has never been such a staggering assault on a president as we are seeing now. All of these peacenik doves over the years are now warhawks, wanting nothing but hard line stances and tough rhetoric with Russia. Dick Cheney said what Russia did in 2016 was an act of war. Really? Where did the missile hit? How many American lives were lost? Which of our soldiers was hit with the first bullet fired? What city was overrun by Russian forces? What navy vessel was sunk? And, more importantly, how many voters were swayed by Russia? 60+ million? Really? Hillary lost because she was a bad candidate, with no message, little personal appeal to working class America, and was just plain unlikable by them. She didn’t lose because of Russian interference. She also didn’t lose because of the 369 and counting excuses she’s been puking out ever since the election. 

Nobody seemed to mind Obama pouring $300,000 into a campaign to beat Netanyahu in Israel. For anyone...anyone...to say United States always good...everyone else always bad...is to be naive at best, and totally brain dead ignorant at worst. We spy, they spy. We interfere, they interfere. We lie, they lie. We go covert, they go covert. It’s the way of the world, like it or not.

We have liberals and conservative pundits trashing Trump for not going hard on Putin. Okay, what would that accomplish? Make bad things worse? Yes. 

They are trashing Trump for throwing our intelligence community under the bus. I cannot honestly blame him. James Clapper, John Brennan, James Comey, Andrew McCabe, Peter Strzok, Lisa Page, the DNC, Hillary Clinton, Rod Rosenstein and only God knows who else in the upper echelon of politics, intelligence and law enforcement have done all they can, and possibly more, to derail him, frame him, assail him, indict him, smear him, and ultimately impeach him. Who threw whom under the bus first? Trump has been under nothing but constant attack from THE SWAMP since he became a serious contender for the White House. It has been unprecedented in American politics. Now we have at least one Democrat wondering where our military is...like he wants a military coup...in our country! Mind boggling.

Quickly is forgotten how just a few days ago Trump called out Merkel for billions being funneled into Russia for their natural gas, while at the same time not paying the full 2% GDP into NATO like they were supposed to be doing for years! Now, because he is publicly ‘nice’ to Putin, he’s a traitor? Well, put me in the same class. From June 2015 to September 2016 I worked in China for a French company building massive pipe racks and arctic pipe sections for Russia’s Yamal LNG plant going up in Siberia...which will be the largest LNG plant in the world. I had Russians working for me and with me, and we got along just fine. They called me ‘Pops’ and they were some of the finest working men I’ve ever had the pleasure to be associated with. I got into a fight with a Bulgarian who was slapping a Chinese woman around and when his five buddies came running to jump me, these Russians stood guard and let me finish whipping the guy without interference. One of the Russians told them, “This is none of your business. Pops will be through in a minute.” So call me a traitor if you wish. I helped the Russians build an LNG plant that will help keep them economically viable and funnel natural gas to the Germans for years to come. And what’s worse than that...I did it for MONEY! Oh the horror! And, by the way, the Chinese people are some of the friendliest, most gracious, and hospitable people I’ve ever been around, and I’ve traveled to every habitable continent except Australia. It isn’t people that cause crises between countries...it’s governments and their leaders who don’t know how to play nice and work well with each other. 

It costs nothing to be courteous, friendly and amenable. It costs everything to be antagonistic and hard line, and could lead to a real war. Keep your friends close, and your enemies closer...isn’t that the saying? The Russian government is our enemy, make no mistake. And Trump knows this. He also knows we can’t continue to go around pissing off our enemies all the time. FDR knew it...Kennedy knew it...Carter knew it...Reagan knew it...Bush knew it...Clinton knew it...Bush II knew it...Obama knew it...and now Trump knows it. I only wish the rest of our country would also know it, and know that our intelligence community is NOT our friend. They may not be the ‘enemy’, but they ain’t far from it. Politics is a dirty business, and it means you have to rub shoulders with dirty people. If YOU don’t know it, then perhaps you should get a real life, pop your head up from the cesspool of partisan politics, think for yourself for a change, and realize we live in a dirty, dirty world. Trump didn’t make it that way. That’s the way it’s been since Cain killed Abel. And you aren’t going to change it one little bit by destroying Trump. It will still be just as dirty once he’s gone. Maybe dirtier.

[smartwebhostingblog]

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

New Post has been published on http://brummy80.com/a-9-6-yield-no-k-1-record-earnings-again-for-niche-leader/

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

Looking for a solid, high-yield niche play? Maybe you should consider Hoegh LNG Partners LP (HMLP), the only publicly traded pure play on FSRUs.

FSRU stands for “Floating Storage & Regasification Unit,” and it’s a rapidly growing presence in the LNG shipping industry. HMLP’s parent/sponsor, Höegh LNG Holdings Ltd., is the largest provider of FSRUs in the market.

FSRU leasing/chartering solves many problems for charterer companies and countries. It’s slow and expensive to build an LNG import terminal, so FSRUs are being increasingly used to give countries access to LNG.

Like many of the firms we cover, HMLP operates on long-term contracts – its current average is 10.75 years for its five-vessel fleet, which includes two JV vessels. This is among the longest contract tenures that we’ve run across in the shipping industry.

(Source: HMLP site)

Common Distributions:

HMLP pays in a Feb-May-Aug-Nov. cycle and should go ex-dividend again in early November. At $18.25, the common units yield 9.64%.

Common unit coverage rose to 1.22X in Q2 ’18, which is the highest coverage level since HMLP’s IPO. Coverage has averaged 1.16X over the past four quarters:

Taxes:

Since it’s a C-Corp, HMLP issues a 1099 at tax time:

“The Partnership has elected to be treated as a C-Corporation for tax purposes (our investors receive the standard 1099 form and not a K-1 form).”

“Distributions we pay to U.S. unit holders will be treated as a dividend for U.S. federal income tax purposes, to the extent the distributions come from earnings and profits (“E&P”) and as a non-dividend distribution or a return of capital (“ROC”) to the extent the distributions exceed E&P.” (Source: HMLP site)

In 2017, HMLP’s ROC ranged between $.188 and $.1979 per quarterly payout. Investors get the benefit of sheltered income, but ROC does decrease your basis, so take a look at this if you’re thinking of selling at some point down the road.

Management has had distribution increases of 4.2% and 2.3% over the past two years, while coverage has been over 1X since Q2 ’16:

(Source: HMLP site)

Preferred Distributions:

HMLP also has a preferred series, Hoegh LNG Partners LP 8.75% Cumulative Perpetual Redeemable Units Series A (HMLP.PA). These are cumulative preferred units which offer you the additional protection of knowing that management must pay you any skipped distributions before it pays the common units. These units also rank senior to the common units in the event of a liquidation.

At $25.55, these preferred units yield 8.56%.

There’s no maturity date, but the call date is 10/5/22, after which HMLP can redeem if they so desire. This table details the annualized yield to this call date, if they were to be redeemed on 10/5/22. That yield is 7.79%, a bit lower than the current yield, since these units are $.55 above the $25.00 call value:

As is usually the case, these preferred units have a much higher coverage factor than the common units. Coverage has averaged 7.59 so far in 2018, on a net income basis, and 6.42X on a DCF basis:

Earnings:

HMLP has had strong growth in EBITDA, DCF, and net income over the past three quarters, with EBITDA up 24.72%, DCF up 17.81%, and net income up 56.07% in Q2 ’18. The 56% jump in net income is due to HMLP owning 100% of the Höegh Grace vessel in 2018, vs. only 51% in 2017.

Sequentially, HMLP also had record EBITDA, in Q2 ’18, Q1 ’18, and Q4 ’17, with DCF hitting records in Q3 ’17 through Q2 ’18:

With the unit count flat, and distributions/unit rising just 3.24%, HMLP’s coverage expanded by 9.11% over the past four quarters, as DCF grew 21.34%:

HMLP has two operating segments – majority held FSRUs, which contributed $58.58M in segment EBITDA for Q1 -2 ’18; and joint venture FSRUs, which contributed $16.39M in segment EBITDA for the same period.

Risks:

Boil-off issue – As we reported previously, HMLP has a “boil-off” problem. This still hadn’t been resolved, as of 5/31/18, when they reported Q1 2018 earnings. The charterer of the Neptune and Suez Cape Ann vessels filed a claim vs. these vessels, for excessive, past “boil-off.” The vessels are allowed a certain amount of LNG boil-off, (it’s related to gas which is ultimately being lost during a passage – in this case, it was when the vessels were being used for LNG transport years ago, before they were converted to FSRUs), but the charterer claims that they didn’t meet the performance standards for their contracts. HMLP’s 50% share of the accrual was approximately $11.9 million as of June 30, 2018.

However, HMLP is being indemnified by its parent company HLNG.

Management updated this info on the Q2 ’18 earnings call:

“The process has been a bit in limbo during the transition between NG and Total, but I think now Total have closed that transaction. We should be able to come to some kind of agreement on that in relatively short order.

But just to repeat again it’s not something will have an impact on the MLP.”

EGAS Gallant contract:

“EGAS has requested to start a discussion with Hoegh LNG over terms for the termination of the Gallant contract in advance of its April 2020 maturity. And that’s something that would require HLNG consent and compensation. From an HMLP point of view, should HLNG discontinue the charter of Gallant through its Egyptian subsidiary for the purposes of serving the EGAS contract, HMLP has the options to charter the Gallant to HLNG until 2025 at a rate, which is equal to 90% of its current rate. Whether it would in April 2020 or sooner, HMLP current exercised its options. If it does, the impact would negatively impact results over the current levels of distributable cash flow of over $17 million per quarter. The impact will be small enough to maintain a comfortable coverage ratio.”

Management updated this issue on the Q2 earnings call:

“I’d say that at least at the moment the discussions are quite good spirited. And I’m sure we’ll come to something, some kind of agreement. I mean they – I do want to take down to one FSRU that was clear they have got a lot of gas coming online. So that’s their need. And we’ve obviously got a contract in place.”

Tailwinds:

HMLP’s parent, HLNG, has additional FSRUs which it could eventually drop down to HMLP. However, it has been involved in lengthy contracting talks for some of its vessels. Management has previously indicated that they’d like to acquire a dropdown asset at least once each year.

The Independence vessel appears to be the next dropdown candidate. However, on the Q2 ’18 call, management said that,

“it’s difficult to see another drop down this year, not impossible, but difficult. Beyond that we’re obviously working very hard to make a few things come together. The Independence is possible. The projects in Australia, which the parents have been working on, that one solidifies, is possible. And then there is also a few other things out there which aren’t in the public domain that also would be possible.”

(Source: HMLP site)

Analysts’ Price Targets:

At $18.25, HMLP common units are 4.45% below the lowest price target of $19.10, and 12.09% below the average $20.76 price target.

Performance:

Like many other shipping stocks, HMLP has been underperforming the market in 2018, although it has outperformed the benchmark Claymore/Delta Global Shipping ETF (SEA).

Valuations:

HMLP has a slightly lower, but still very attractive yield, and better distribution coverage than other LNG carriers. It seems to be getting a slight premium for its better coverage in its price/DCF and price/book valuations.

Financials:

This is good to see – HMLP’s ROA, ROE, current ratio, and operating margin have all improved over the past few quarters, while its debt leverage has become much lower.

Management has chopped net debt/EBITDA down from a 5.1X level as of 9/30/17, to a 3.5X level, which is much lower than the 5.41X industry average.

Debt and Liquidity:

The balance on HMLP’s revolving credit facility line will be further reduced in Q3 ’18, as a result of a $6M repayment made after the close of Q2 ’18.

As of June 30, 2018, HMLP had cash and cash equivalents of $21.0M and an undrawn portion of $39.7M of the $85M revolving credit facility.

(The left column is as of 6/30/18, and the right column is as of 12/31/17.)

(Source: HMLP site)

Options:

HMLP doesn’t have options, but you can see over 25 other trades daily in our public Covered Calls Table and over 30 trades in our Cash Secured Puts Table.

Summary:

We rate HMLP a buy, based upon its attractive, well-covered yield, and conservative debt management.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

CLARIFICATION: We have two investing services. Our legacy service, DoubleDividendStocks, has focused on selling options on dividend stocks since 2009.

Our Marketplace service, Hidden Dividend Stocks Plus, focuses on undercovered, undervalued income vehicles, and special high yield situations.

We scour the US and world markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

These stocks are often small cap, low beta equities that offer stronger price protection vs. market volatility.

We publish exclusive articles each week with investing ideas for the HDS+ site that you won’t see anywhere else.

Disclosure: I am/we are long HMLP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[hostingnewsfeed]

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

New Post has been published on http://brummy80.com/a-9-6-yield-no-k-1-record-earnings-again-for-niche-leader/

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

Looking for a solid, high-yield niche play? Maybe you should consider Hoegh LNG Partners LP (HMLP), the only publicly traded pure play on FSRUs.

FSRU stands for “Floating Storage & Regasification Unit,” and it’s a rapidly growing presence in the LNG shipping industry. HMLP’s parent/sponsor, Höegh LNG Holdings Ltd., is the largest provider of FSRUs in the market.

FSRU leasing/chartering solves many problems for charterer companies and countries. It’s slow and expensive to build an LNG import terminal, so FSRUs are being increasingly used to give countries access to LNG.

Like many of the firms we cover, HMLP operates on long-term contracts – its current average is 10.75 years for its five-vessel fleet, which includes two JV vessels. This is among the longest contract tenures that we’ve run across in the shipping industry.

(Source: HMLP site)

Common Distributions:

HMLP pays in a Feb-May-Aug-Nov. cycle and should go ex-dividend again in early November. At $18.25, the common units yield 9.64%.

Common unit coverage rose to 1.22X in Q2 ’18, which is the highest coverage level since HMLP’s IPO. Coverage has averaged 1.16X over the past four quarters:

Taxes:

Since it’s a C-Corp, HMLP issues a 1099 at tax time:

“The Partnership has elected to be treated as a C-Corporation for tax purposes (our investors receive the standard 1099 form and not a K-1 form).”

“Distributions we pay to U.S. unit holders will be treated as a dividend for U.S. federal income tax purposes, to the extent the distributions come from earnings and profits (“E&P”) and as a non-dividend distribution or a return of capital (“ROC”) to the extent the distributions exceed E&P.” (Source: HMLP site)

In 2017, HMLP’s ROC ranged between $.188 and $.1979 per quarterly payout. Investors get the benefit of sheltered income, but ROC does decrease your basis, so take a look at this if you’re thinking of selling at some point down the road.

Management has had distribution increases of 4.2% and 2.3% over the past two years, while coverage has been over 1X since Q2 ’16:

(Source: HMLP site)

Preferred Distributions:

HMLP also has a preferred series, Hoegh LNG Partners LP 8.75% Cumulative Perpetual Redeemable Units Series A (HMLP.PA). These are cumulative preferred units which offer you the additional protection of knowing that management must pay you any skipped distributions before it pays the common units. These units also rank senior to the common units in the event of a liquidation.

At $25.55, these preferred units yield 8.56%.

There’s no maturity date, but the call date is 10/5/22, after which HMLP can redeem if they so desire. This table details the annualized yield to this call date, if they were to be redeemed on 10/5/22. That yield is 7.79%, a bit lower than the current yield, since these units are $.55 above the $25.00 call value:

As is usually the case, these preferred units have a much higher coverage factor than the common units. Coverage has averaged 7.59 so far in 2018, on a net income basis, and 6.42X on a DCF basis:

Earnings:

HMLP has had strong growth in EBITDA, DCF, and net income over the past three quarters, with EBITDA up 24.72%, DCF up 17.81%, and net income up 56.07% in Q2 ’18. The 56% jump in net income is due to HMLP owning 100% of the Höegh Grace vessel in 2018, vs. only 51% in 2017.

Sequentially, HMLP also had record EBITDA, in Q2 ’18, Q1 ’18, and Q4 ’17, with DCF hitting records in Q3 ’17 through Q2 ’18:

With the unit count flat, and distributions/unit rising just 3.24%, HMLP’s coverage expanded by 9.11% over the past four quarters, as DCF grew 21.34%:

HMLP has two operating segments – majority held FSRUs, which contributed $58.58M in segment EBITDA for Q1 -2 ’18; and joint venture FSRUs, which contributed $16.39M in segment EBITDA for the same period.

Risks:

Boil-off issue – As we reported previously, HMLP has a “boil-off” problem. This still hadn’t been resolved, as of 5/31/18, when they reported Q1 2018 earnings. The charterer of the Neptune and Suez Cape Ann vessels filed a claim vs. these vessels, for excessive, past “boil-off.” The vessels are allowed a certain amount of LNG boil-off, (it’s related to gas which is ultimately being lost during a passage – in this case, it was when the vessels were being used for LNG transport years ago, before they were converted to FSRUs), but the charterer claims that they didn’t meet the performance standards for their contracts. HMLP’s 50% share of the accrual was approximately $11.9 million as of June 30, 2018.

However, HMLP is being indemnified by its parent company HLNG.

Management updated this info on the Q2 ’18 earnings call:

“The process has been a bit in limbo during the transition between NG and Total, but I think now Total have closed that transaction. We should be able to come to some kind of agreement on that in relatively short order.

But just to repeat again it’s not something will have an impact on the MLP.”

EGAS Gallant contract:

“EGAS has requested to start a discussion with Hoegh LNG over terms for the termination of the Gallant contract in advance of its April 2020 maturity. And that’s something that would require HLNG consent and compensation. From an HMLP point of view, should HLNG discontinue the charter of Gallant through its Egyptian subsidiary for the purposes of serving the EGAS contract, HMLP has the options to charter the Gallant to HLNG until 2025 at a rate, which is equal to 90% of its current rate. Whether it would in April 2020 or sooner, HMLP current exercised its options. If it does, the impact would negatively impact results over the current levels of distributable cash flow of over $17 million per quarter. The impact will be small enough to maintain a comfortable coverage ratio.”

Management updated this issue on the Q2 earnings call:

“I’d say that at least at the moment the discussions are quite good spirited. And I’m sure we’ll come to something, some kind of agreement. I mean they – I do want to take down to one FSRU that was clear they have got a lot of gas coming online. So that’s their need. And we’ve obviously got a contract in place.”

Tailwinds:

HMLP’s parent, HLNG, has additional FSRUs which it could eventually drop down to HMLP. However, it has been involved in lengthy contracting talks for some of its vessels. Management has previously indicated that they’d like to acquire a dropdown asset at least once each year.

The Independence vessel appears to be the next dropdown candidate. However, on the Q2 ’18 call, management said that,

“it’s difficult to see another drop down this year, not impossible, but difficult. Beyond that we’re obviously working very hard to make a few things come together. The Independence is possible. The projects in Australia, which the parents have been working on, that one solidifies, is possible. And then there is also a few other things out there which aren’t in the public domain that also would be possible.”

(Source: HMLP site)

Analysts’ Price Targets:

At $18.25, HMLP common units are 4.45% below the lowest price target of $19.10, and 12.09% below the average $20.76 price target.

Performance:

Like many other shipping stocks, HMLP has been underperforming the market in 2018, although it has outperformed the benchmark Claymore/Delta Global Shipping ETF (SEA).

Valuations:

HMLP has a slightly lower, but still very attractive yield, and better distribution coverage than other LNG carriers. It seems to be getting a slight premium for its better coverage in its price/DCF and price/book valuations.

Financials:

This is good to see – HMLP’s ROA, ROE, current ratio, and operating margin have all improved over the past few quarters, while its debt leverage has become much lower.

Management has chopped net debt/EBITDA down from a 5.1X level as of 9/30/17, to a 3.5X level, which is much lower than the 5.41X industry average.

Debt and Liquidity:

The balance on HMLP’s revolving credit facility line will be further reduced in Q3 ’18, as a result of a $6M repayment made after the close of Q2 ’18.

As of June 30, 2018, HMLP had cash and cash equivalents of $21.0M and an undrawn portion of $39.7M of the $85M revolving credit facility.

(The left column is as of 6/30/18, and the right column is as of 12/31/17.)

(Source: HMLP site)

Options:

HMLP doesn’t have options, but you can see over 25 other trades daily in our public Covered Calls Table and over 30 trades in our Cash Secured Puts Table.

Summary:

We rate HMLP a buy, based upon its attractive, well-covered yield, and conservative debt management.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

CLARIFICATION: We have two investing services. Our legacy service, DoubleDividendStocks, has focused on selling options on dividend stocks since 2009.

Our Marketplace service, Hidden Dividend Stocks Plus, focuses on undercovered, undervalued income vehicles, and special high yield situations.

We scour the US and world markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

These stocks are often small cap, low beta equities that offer stronger price protection vs. market volatility.

We publish exclusive articles each week with investing ideas for the HDS+ site that you won’t see anywhere else.

Disclosure: I am/we are long HMLP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[awesomecolorfulcollectorwombat]

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

New Post has been published on http://affordablewebhostingsearch.com/a-9-6-yield-no-k-1-record-earnings-again-for-niche-leader/

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

Looking for a solid, high-yield niche play? Maybe you should consider Hoegh LNG Partners LP (HMLP), the only publicly traded pure play on FSRUs.

FSRU stands for “Floating Storage & Regasification Unit,” and it’s a rapidly growing presence in the LNG shipping industry. HMLP’s parent/sponsor, Höegh LNG Holdings Ltd., is the largest provider of FSRUs in the market.

FSRU leasing/chartering solves many problems for charterer companies and countries. It’s slow and expensive to build an LNG import terminal, so FSRUs are being increasingly used to give countries access to LNG.

Like many of the firms we cover, HMLP operates on long-term contracts – its current average is 10.75 years for its five-vessel fleet, which includes two JV vessels. This is among the longest contract tenures that we’ve run across in the shipping industry.

(Source: HMLP site)

Common Distributions:

HMLP pays in a Feb-May-Aug-Nov. cycle and should go ex-dividend again in early November. At $18.25, the common units yield 9.64%.

Common unit coverage rose to 1.22X in Q2 ’18, which is the highest coverage level since HMLP’s IPO. Coverage has averaged 1.16X over the past four quarters:

Taxes:

Since it’s a C-Corp, HMLP issues a 1099 at tax time:

“The Partnership has elected to be treated as a C-Corporation for tax purposes (our investors receive the standard 1099 form and not a K-1 form).”

“Distributions we pay to U.S. unit holders will be treated as a dividend for U.S. federal income tax purposes, to the extent the distributions come from earnings and profits (“E&P”) and as a non-dividend distribution or a return of capital (“ROC”) to the extent the distributions exceed E&P.” (Source: HMLP site)

In 2017, HMLP’s ROC ranged between $.188 and $.1979 per quarterly payout. Investors get the benefit of sheltered income, but ROC does decrease your basis, so take a look at this if you’re thinking of selling at some point down the road.

Management has had distribution increases of 4.2% and 2.3% over the past two years, while coverage has been over 1X since Q2 ’16:

(Source: HMLP site)

Preferred Distributions:

HMLP also has a preferred series, Hoegh LNG Partners LP 8.75% Cumulative Perpetual Redeemable Units Series A (HMLP.PA). These are cumulative preferred units which offer you the additional protection of knowing that management must pay you any skipped distributions before it pays the common units. These units also rank senior to the common units in the event of a liquidation.

At $25.55, these preferred units yield 8.56%.

There’s no maturity date, but the call date is 10/5/22, after which HMLP can redeem if they so desire. This table details the annualized yield to this call date, if they were to be redeemed on 10/5/22. That yield is 7.79%, a bit lower than the current yield, since these units are $.55 above the $25.00 call value:

As is usually the case, these preferred units have a much higher coverage factor than the common units. Coverage has averaged 7.59 so far in 2018, on a net income basis, and 6.42X on a DCF basis:

Earnings:

HMLP has had strong growth in EBITDA, DCF, and net income over the past three quarters, with EBITDA up 24.72%, DCF up 17.81%, and net income up 56.07% in Q2 ’18. The 56% jump in net income is due to HMLP owning 100% of the Höegh Grace vessel in 2018, vs. only 51% in 2017.

Sequentially, HMLP also had record EBITDA, in Q2 ’18, Q1 ’18, and Q4 ’17, with DCF hitting records in Q3 ’17 through Q2 ’18:

With the unit count flat, and distributions/unit rising just 3.24%, HMLP’s coverage expanded by 9.11% over the past four quarters, as DCF grew 21.34%:

HMLP has two operating segments – majority held FSRUs, which contributed $58.58M in segment EBITDA for Q1 -2 ’18; and joint venture FSRUs, which contributed $16.39M in segment EBITDA for the same period.

Risks:

Boil-off issue – As we reported previously, HMLP has a “boil-off” problem. This still hadn’t been resolved, as of 5/31/18, when they reported Q1 2018 earnings. The charterer of the Neptune and Suez Cape Ann vessels filed a claim vs. these vessels, for excessive, past “boil-off.” The vessels are allowed a certain amount of LNG boil-off, (it’s related to gas which is ultimately being lost during a passage – in this case, it was when the vessels were being used for LNG transport years ago, before they were converted to FSRUs), but the charterer claims that they didn’t meet the performance standards for their contracts. HMLP’s 50% share of the accrual was approximately $11.9 million as of June 30, 2018.

However, HMLP is being indemnified by its parent company HLNG.

Management updated this info on the Q2 ’18 earnings call:

“The process has been a bit in limbo during the transition between NG and Total, but I think now Total have closed that transaction. We should be able to come to some kind of agreement on that in relatively short order.

But just to repeat again it’s not something will have an impact on the MLP.”

EGAS Gallant contract:

“EGAS has requested to start a discussion with Hoegh LNG over terms for the termination of the Gallant contract in advance of its April 2020 maturity. And that’s something that would require HLNG consent and compensation. From an HMLP point of view, should HLNG discontinue the charter of Gallant through its Egyptian subsidiary for the purposes of serving the EGAS contract, HMLP has the options to charter the Gallant to HLNG until 2025 at a rate, which is equal to 90% of its current rate. Whether it would in April 2020 or sooner, HMLP current exercised its options. If it does, the impact would negatively impact results over the current levels of distributable cash flow of over $17 million per quarter. The impact will be small enough to maintain a comfortable coverage ratio.”

Management updated this issue on the Q2 earnings call:

“I’d say that at least at the moment the discussions are quite good spirited. And I’m sure we’ll come to something, some kind of agreement. I mean they – I do want to take down to one FSRU that was clear they have got a lot of gas coming online. So that’s their need. And we’ve obviously got a contract in place.”

Tailwinds:

HMLP’s parent, HLNG, has additional FSRUs which it could eventually drop down to HMLP. However, it has been involved in lengthy contracting talks for some of its vessels. Management has previously indicated that they’d like to acquire a dropdown asset at least once each year.

The Independence vessel appears to be the next dropdown candidate. However, on the Q2 ’18 call, management said that,

“it’s difficult to see another drop down this year, not impossible, but difficult. Beyond that we’re obviously working very hard to make a few things come together. The Independence is possible. The projects in Australia, which the parents have been working on, that one solidifies, is possible. And then there is also a few other things out there which aren’t in the public domain that also would be possible.”

(Source: HMLP site)

Analysts’ Price Targets:

At $18.25, HMLP common units are 4.45% below the lowest price target of $19.10, and 12.09% below the average $20.76 price target.

Performance:

Like many other shipping stocks, HMLP has been underperforming the market in 2018, although it has outperformed the benchmark Claymore/Delta Global Shipping ETF (SEA).

Valuations:

HMLP has a slightly lower, but still very attractive yield, and better distribution coverage than other LNG carriers. It seems to be getting a slight premium for its better coverage in its price/DCF and price/book valuations.

Financials:

This is good to see – HMLP’s ROA, ROE, current ratio, and operating margin have all improved over the past few quarters, while its debt leverage has become much lower.

Management has chopped net debt/EBITDA down from a 5.1X level as of 9/30/17, to a 3.5X level, which is much lower than the 5.41X industry average.

Debt and Liquidity:

The balance on HMLP’s revolving credit facility line will be further reduced in Q3 ’18, as a result of a $6M repayment made after the close of Q2 ’18.

As of June 30, 2018, HMLP had cash and cash equivalents of $21.0M and an undrawn portion of $39.7M of the $85M revolving credit facility.

(The left column is as of 6/30/18, and the right column is as of 12/31/17.)

(Source: HMLP site)

Options:

HMLP doesn’t have options, but you can see over 25 other trades daily in our public Covered Calls Table and over 30 trades in our Cash Secured Puts Table.

Summary:

We rate HMLP a buy, based upon its attractive, well-covered yield, and conservative debt management.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

CLARIFICATION: We have two investing services. Our legacy service, DoubleDividendStocks, has focused on selling options on dividend stocks since 2009.

Our Marketplace service, Hidden Dividend Stocks Plus, focuses on undercovered, undervalued income vehicles, and special high yield situations.

We scour the US and world markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

These stocks are often small cap, low beta equities that offer stronger price protection vs. market volatility.

We publish exclusive articles each week with investing ideas for the HDS+ site that you won’t see anywhere else.

Disclosure: I am/we are long HMLP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[lazilysillyprince]

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

New Post has been published on http://affordablewebhostingsearch.com/a-9-6-yield-no-k-1-record-earnings-again-for-niche-leader/

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

Looking for a solid, high-yield niche play? Maybe you should consider Hoegh LNG Partners LP (HMLP), the only publicly traded pure play on FSRUs.

FSRU stands for “Floating Storage & Regasification Unit,” and it’s a rapidly growing presence in the LNG shipping industry. HMLP’s parent/sponsor, Höegh LNG Holdings Ltd., is the largest provider of FSRUs in the market.

FSRU leasing/chartering solves many problems for charterer companies and countries. It’s slow and expensive to build an LNG import terminal, so FSRUs are being increasingly used to give countries access to LNG.

Like many of the firms we cover, HMLP operates on long-term contracts – its current average is 10.75 years for its five-vessel fleet, which includes two JV vessels. This is among the longest contract tenures that we’ve run across in the shipping industry.

(Source: HMLP site)

Common Distributions:

HMLP pays in a Feb-May-Aug-Nov. cycle and should go ex-dividend again in early November. At $18.25, the common units yield 9.64%.

Common unit coverage rose to 1.22X in Q2 ’18, which is the highest coverage level since HMLP’s IPO. Coverage has averaged 1.16X over the past four quarters:

Taxes:

Since it’s a C-Corp, HMLP issues a 1099 at tax time:

“The Partnership has elected to be treated as a C-Corporation for tax purposes (our investors receive the standard 1099 form and not a K-1 form).”

“Distributions we pay to U.S. unit holders will be treated as a dividend for U.S. federal income tax purposes, to the extent the distributions come from earnings and profits (“E&P”) and as a non-dividend distribution or a return of capital (“ROC”) to the extent the distributions exceed E&P.” (Source: HMLP site)

In 2017, HMLP’s ROC ranged between $.188 and $.1979 per quarterly payout. Investors get the benefit of sheltered income, but ROC does decrease your basis, so take a look at this if you’re thinking of selling at some point down the road.

Management has had distribution increases of 4.2% and 2.3% over the past two years, while coverage has been over 1X since Q2 ’16:

(Source: HMLP site)

Preferred Distributions:

HMLP also has a preferred series, Hoegh LNG Partners LP 8.75% Cumulative Perpetual Redeemable Units Series A (HMLP.PA). These are cumulative preferred units which offer you the additional protection of knowing that management must pay you any skipped distributions before it pays the common units. These units also rank senior to the common units in the event of a liquidation.

At $25.55, these preferred units yield 8.56%.

There’s no maturity date, but the call date is 10/5/22, after which HMLP can redeem if they so desire. This table details the annualized yield to this call date, if they were to be redeemed on 10/5/22. That yield is 7.79%, a bit lower than the current yield, since these units are $.55 above the $25.00 call value:

As is usually the case, these preferred units have a much higher coverage factor than the common units. Coverage has averaged 7.59 so far in 2018, on a net income basis, and 6.42X on a DCF basis:

Earnings:

HMLP has had strong growth in EBITDA, DCF, and net income over the past three quarters, with EBITDA up 24.72%, DCF up 17.81%, and net income up 56.07% in Q2 ’18. The 56% jump in net income is due to HMLP owning 100% of the Höegh Grace vessel in 2018, vs. only 51% in 2017.

Sequentially, HMLP also had record EBITDA, in Q2 ’18, Q1 ’18, and Q4 ’17, with DCF hitting records in Q3 ’17 through Q2 ’18:

With the unit count flat, and distributions/unit rising just 3.24%, HMLP’s coverage expanded by 9.11% over the past four quarters, as DCF grew 21.34%:

HMLP has two operating segments – majority held FSRUs, which contributed $58.58M in segment EBITDA for Q1 -2 ’18; and joint venture FSRUs, which contributed $16.39M in segment EBITDA for the same period.

Risks:

Boil-off issue – As we reported previously, HMLP has a “boil-off” problem. This still hadn’t been resolved, as of 5/31/18, when they reported Q1 2018 earnings. The charterer of the Neptune and Suez Cape Ann vessels filed a claim vs. these vessels, for excessive, past “boil-off.” The vessels are allowed a certain amount of LNG boil-off, (it’s related to gas which is ultimately being lost during a passage – in this case, it was when the vessels were being used for LNG transport years ago, before they were converted to FSRUs), but the charterer claims that they didn’t meet the performance standards for their contracts. HMLP’s 50% share of the accrual was approximately $11.9 million as of June 30, 2018.

However, HMLP is being indemnified by its parent company HLNG.

Management updated this info on the Q2 ’18 earnings call:

“The process has been a bit in limbo during the transition between NG and Total, but I think now Total have closed that transaction. We should be able to come to some kind of agreement on that in relatively short order.

But just to repeat again it’s not something will have an impact on the MLP.”

EGAS Gallant contract:

“EGAS has requested to start a discussion with Hoegh LNG over terms for the termination of the Gallant contract in advance of its April 2020 maturity. And that’s something that would require HLNG consent and compensation. From an HMLP point of view, should HLNG discontinue the charter of Gallant through its Egyptian subsidiary for the purposes of serving the EGAS contract, HMLP has the options to charter the Gallant to HLNG until 2025 at a rate, which is equal to 90% of its current rate. Whether it would in April 2020 or sooner, HMLP current exercised its options. If it does, the impact would negatively impact results over the current levels of distributable cash flow of over $17 million per quarter. The impact will be small enough to maintain a comfortable coverage ratio.”

Management updated this issue on the Q2 earnings call:

“I’d say that at least at the moment the discussions are quite good spirited. And I’m sure we’ll come to something, some kind of agreement. I mean they – I do want to take down to one FSRU that was clear they have got a lot of gas coming online. So that’s their need. And we’ve obviously got a contract in place.”

Tailwinds:

HMLP’s parent, HLNG, has additional FSRUs which it could eventually drop down to HMLP. However, it has been involved in lengthy contracting talks for some of its vessels. Management has previously indicated that they’d like to acquire a dropdown asset at least once each year.

The Independence vessel appears to be the next dropdown candidate. However, on the Q2 ’18 call, management said that,

“it’s difficult to see another drop down this year, not impossible, but difficult. Beyond that we’re obviously working very hard to make a few things come together. The Independence is possible. The projects in Australia, which the parents have been working on, that one solidifies, is possible. And then there is also a few other things out there which aren’t in the public domain that also would be possible.”

(Source: HMLP site)

Analysts’ Price Targets:

At $18.25, HMLP common units are 4.45% below the lowest price target of $19.10, and 12.09% below the average $20.76 price target.

Performance:

Like many other shipping stocks, HMLP has been underperforming the market in 2018, although it has outperformed the benchmark Claymore/Delta Global Shipping ETF (SEA).

Valuations:

HMLP has a slightly lower, but still very attractive yield, and better distribution coverage than other LNG carriers. It seems to be getting a slight premium for its better coverage in its price/DCF and price/book valuations.

Financials:

This is good to see – HMLP’s ROA, ROE, current ratio, and operating margin have all improved over the past few quarters, while its debt leverage has become much lower.

Management has chopped net debt/EBITDA down from a 5.1X level as of 9/30/17, to a 3.5X level, which is much lower than the 5.41X industry average.

Debt and Liquidity:

The balance on HMLP’s revolving credit facility line will be further reduced in Q3 ’18, as a result of a $6M repayment made after the close of Q2 ’18.

As of June 30, 2018, HMLP had cash and cash equivalents of $21.0M and an undrawn portion of $39.7M of the $85M revolving credit facility.

(The left column is as of 6/30/18, and the right column is as of 12/31/17.)

(Source: HMLP site)

Options:

HMLP doesn’t have options, but you can see over 25 other trades daily in our public Covered Calls Table and over 30 trades in our Cash Secured Puts Table.

Summary:

We rate HMLP a buy, based upon its attractive, well-covered yield, and conservative debt management.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

CLARIFICATION: We have two investing services. Our legacy service, DoubleDividendStocks, has focused on selling options on dividend stocks since 2009.

Our Marketplace service, Hidden Dividend Stocks Plus, focuses on undercovered, undervalued income vehicles, and special high yield situations.

We scour the US and world markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

These stocks are often small cap, low beta equities that offer stronger price protection vs. market volatility.

We publish exclusive articles each week with investing ideas for the HDS+ site that you won’t see anywhere else.

Disclosure: I am/we are long HMLP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[smartwebhostingblog]

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

New Post has been published on http://affordablewebhostingsearch.com/a-9-6-yield-no-k-1-record-earnings-again-for-niche-leader/

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

Looking for a solid, high-yield niche play? Maybe you should consider Hoegh LNG Partners LP (HMLP), the only publicly traded pure play on FSRUs.

FSRU stands for “Floating Storage & Regasification Unit,” and it’s a rapidly growing presence in the LNG shipping industry. HMLP’s parent/sponsor, Höegh LNG Holdings Ltd., is the largest provider of FSRUs in the market.

FSRU leasing/chartering solves many problems for charterer companies and countries. It’s slow and expensive to build an LNG import terminal, so FSRUs are being increasingly used to give countries access to LNG.

Like many of the firms we cover, HMLP operates on long-term contracts – its current average is 10.75 years for its five-vessel fleet, which includes two JV vessels. This is among the longest contract tenures that we’ve run across in the shipping industry.

(Source: HMLP site)

Common Distributions:

HMLP pays in a Feb-May-Aug-Nov. cycle and should go ex-dividend again in early November. At $18.25, the common units yield 9.64%.

Common unit coverage rose to 1.22X in Q2 ’18, which is the highest coverage level since HMLP’s IPO. Coverage has averaged 1.16X over the past four quarters:

Taxes:

Since it’s a C-Corp, HMLP issues a 1099 at tax time:

“The Partnership has elected to be treated as a C-Corporation for tax purposes (our investors receive the standard 1099 form and not a K-1 form).”

“Distributions we pay to U.S. unit holders will be treated as a dividend for U.S. federal income tax purposes, to the extent the distributions come from earnings and profits (“E&P”) and as a non-dividend distribution or a return of capital (“ROC”) to the extent the distributions exceed E&P.” (Source: HMLP site)

In 2017, HMLP’s ROC ranged between $.188 and $.1979 per quarterly payout. Investors get the benefit of sheltered income, but ROC does decrease your basis, so take a look at this if you’re thinking of selling at some point down the road.

Management has had distribution increases of 4.2% and 2.3% over the past two years, while coverage has been over 1X since Q2 ’16:

(Source: HMLP site)

Preferred Distributions:

HMLP also has a preferred series, Hoegh LNG Partners LP 8.75% Cumulative Perpetual Redeemable Units Series A (HMLP.PA). These are cumulative preferred units which offer you the additional protection of knowing that management must pay you any skipped distributions before it pays the common units. These units also rank senior to the common units in the event of a liquidation.

At $25.55, these preferred units yield 8.56%.

There’s no maturity date, but the call date is 10/5/22, after which HMLP can redeem if they so desire. This table details the annualized yield to this call date, if they were to be redeemed on 10/5/22. That yield is 7.79%, a bit lower than the current yield, since these units are $.55 above the $25.00 call value:

As is usually the case, these preferred units have a much higher coverage factor than the common units. Coverage has averaged 7.59 so far in 2018, on a net income basis, and 6.42X on a DCF basis:

Earnings:

HMLP has had strong growth in EBITDA, DCF, and net income over the past three quarters, with EBITDA up 24.72%, DCF up 17.81%, and net income up 56.07% in Q2 ’18. The 56% jump in net income is due to HMLP owning 100% of the Höegh Grace vessel in 2018, vs. only 51% in 2017.

Sequentially, HMLP also had record EBITDA, in Q2 ’18, Q1 ’18, and Q4 ’17, with DCF hitting records in Q3 ’17 through Q2 ’18:

With the unit count flat, and distributions/unit rising just 3.24%, HMLP’s coverage expanded by 9.11% over the past four quarters, as DCF grew 21.34%:

HMLP has two operating segments – majority held FSRUs, which contributed $58.58M in segment EBITDA for Q1 -2 ’18; and joint venture FSRUs, which contributed $16.39M in segment EBITDA for the same period.

Risks:

Boil-off issue – As we reported previously, HMLP has a “boil-off” problem. This still hadn’t been resolved, as of 5/31/18, when they reported Q1 2018 earnings. The charterer of the Neptune and Suez Cape Ann vessels filed a claim vs. these vessels, for excessive, past “boil-off.” The vessels are allowed a certain amount of LNG boil-off, (it’s related to gas which is ultimately being lost during a passage – in this case, it was when the vessels were being used for LNG transport years ago, before they were converted to FSRUs), but the charterer claims that they didn’t meet the performance standards for their contracts. HMLP’s 50% share of the accrual was approximately $11.9 million as of June 30, 2018.

However, HMLP is being indemnified by its parent company HLNG.

Management updated this info on the Q2 ’18 earnings call:

“The process has been a bit in limbo during the transition between NG and Total, but I think now Total have closed that transaction. We should be able to come to some kind of agreement on that in relatively short order.

But just to repeat again it’s not something will have an impact on the MLP.”

EGAS Gallant contract:

“EGAS has requested to start a discussion with Hoegh LNG over terms for the termination of the Gallant contract in advance of its April 2020 maturity. And that’s something that would require HLNG consent and compensation. From an HMLP point of view, should HLNG discontinue the charter of Gallant through its Egyptian subsidiary for the purposes of serving the EGAS contract, HMLP has the options to charter the Gallant to HLNG until 2025 at a rate, which is equal to 90% of its current rate. Whether it would in April 2020 or sooner, HMLP current exercised its options. If it does, the impact would negatively impact results over the current levels of distributable cash flow of over $17 million per quarter. The impact will be small enough to maintain a comfortable coverage ratio.”

Management updated this issue on the Q2 earnings call:

“I’d say that at least at the moment the discussions are quite good spirited. And I’m sure we’ll come to something, some kind of agreement. I mean they – I do want to take down to one FSRU that was clear they have got a lot of gas coming online. So that’s their need. And we’ve obviously got a contract in place.”

Tailwinds:

HMLP’s parent, HLNG, has additional FSRUs which it could eventually drop down to HMLP. However, it has been involved in lengthy contracting talks for some of its vessels. Management has previously indicated that they’d like to acquire a dropdown asset at least once each year.

The Independence vessel appears to be the next dropdown candidate. However, on the Q2 ’18 call, management said that,

“it’s difficult to see another drop down this year, not impossible, but difficult. Beyond that we’re obviously working very hard to make a few things come together. The Independence is possible. The projects in Australia, which the parents have been working on, that one solidifies, is possible. And then there is also a few other things out there which aren’t in the public domain that also would be possible.”

(Source: HMLP site)

Analysts’ Price Targets:

At $18.25, HMLP common units are 4.45% below the lowest price target of $19.10, and 12.09% below the average $20.76 price target.

Performance:

Like many other shipping stocks, HMLP has been underperforming the market in 2018, although it has outperformed the benchmark Claymore/Delta Global Shipping ETF (SEA).

Valuations:

HMLP has a slightly lower, but still very attractive yield, and better distribution coverage than other LNG carriers. It seems to be getting a slight premium for its better coverage in its price/DCF and price/book valuations.

Financials:

This is good to see – HMLP’s ROA, ROE, current ratio, and operating margin have all improved over the past few quarters, while its debt leverage has become much lower.

Management has chopped net debt/EBITDA down from a 5.1X level as of 9/30/17, to a 3.5X level, which is much lower than the 5.41X industry average.

Debt and Liquidity:

The balance on HMLP’s revolving credit facility line will be further reduced in Q3 ’18, as a result of a $6M repayment made after the close of Q2 ’18.

As of June 30, 2018, HMLP had cash and cash equivalents of $21.0M and an undrawn portion of $39.7M of the $85M revolving credit facility.

(The left column is as of 6/30/18, and the right column is as of 12/31/17.)

(Source: HMLP site)

Options:

HMLP doesn’t have options, but you can see over 25 other trades daily in our public Covered Calls Table and over 30 trades in our Cash Secured Puts Table.

Summary:

We rate HMLP a buy, based upon its attractive, well-covered yield, and conservative debt management.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

CLARIFICATION: We have two investing services. Our legacy service, DoubleDividendStocks, has focused on selling options on dividend stocks since 2009.

Our Marketplace service, Hidden Dividend Stocks Plus, focuses on undercovered, undervalued income vehicles, and special high yield situations.

We scour the US and world markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

These stocks are often small cap, low beta equities that offer stronger price protection vs. market volatility.

We publish exclusive articles each week with investing ideas for the HDS+ site that you won’t see anywhere else.

Disclosure: I am/we are long HMLP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[hostingnewsfeed]

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

New Post has been published on http://affordablewebhostingsearch.com/a-9-6-yield-no-k-1-record-earnings-again-for-niche-leader/

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

Looking for a solid, high-yield niche play? Maybe you should consider Hoegh LNG Partners LP (HMLP), the only publicly traded pure play on FSRUs.

FSRU stands for “Floating Storage & Regasification Unit,” and it’s a rapidly growing presence in the LNG shipping industry. HMLP’s parent/sponsor, Höegh LNG Holdings Ltd., is the largest provider of FSRUs in the market.

FSRU leasing/chartering solves many problems for charterer companies and countries. It’s slow and expensive to build an LNG import terminal, so FSRUs are being increasingly used to give countries access to LNG.

Like many of the firms we cover, HMLP operates on long-term contracts – its current average is 10.75 years for its five-vessel fleet, which includes two JV vessels. This is among the longest contract tenures that we’ve run across in the shipping industry.

(Source: HMLP site)

Common Distributions:

HMLP pays in a Feb-May-Aug-Nov. cycle and should go ex-dividend again in early November. At $18.25, the common units yield 9.64%.

Common unit coverage rose to 1.22X in Q2 ’18, which is the highest coverage level since HMLP’s IPO. Coverage has averaged 1.16X over the past four quarters:

Taxes:

Since it’s a C-Corp, HMLP issues a 1099 at tax time:

“The Partnership has elected to be treated as a C-Corporation for tax purposes (our investors receive the standard 1099 form and not a K-1 form).”

“Distributions we pay to U.S. unit holders will be treated as a dividend for U.S. federal income tax purposes, to the extent the distributions come from earnings and profits (“E&P”) and as a non-dividend distribution or a return of capital (“ROC”) to the extent the distributions exceed E&P.” (Source: HMLP site)

In 2017, HMLP’s ROC ranged between $.188 and $.1979 per quarterly payout. Investors get the benefit of sheltered income, but ROC does decrease your basis, so take a look at this if you’re thinking of selling at some point down the road.

Management has had distribution increases of 4.2% and 2.3% over the past two years, while coverage has been over 1X since Q2 ’16:

(Source: HMLP site)

Preferred Distributions:

HMLP also has a preferred series, Hoegh LNG Partners LP 8.75% Cumulative Perpetual Redeemable Units Series A (HMLP.PA). These are cumulative preferred units which offer you the additional protection of knowing that management must pay you any skipped distributions before it pays the common units. These units also rank senior to the common units in the event of a liquidation.

At $25.55, these preferred units yield 8.56%.

There’s no maturity date, but the call date is 10/5/22, after which HMLP can redeem if they so desire. This table details the annualized yield to this call date, if they were to be redeemed on 10/5/22. That yield is 7.79%, a bit lower than the current yield, since these units are $.55 above the $25.00 call value:

As is usually the case, these preferred units have a much higher coverage factor than the common units. Coverage has averaged 7.59 so far in 2018, on a net income basis, and 6.42X on a DCF basis:

Earnings:

HMLP has had strong growth in EBITDA, DCF, and net income over the past three quarters, with EBITDA up 24.72%, DCF up 17.81%, and net income up 56.07% in Q2 ’18. The 56% jump in net income is due to HMLP owning 100% of the Höegh Grace vessel in 2018, vs. only 51% in 2017.

Sequentially, HMLP also had record EBITDA, in Q2 ’18, Q1 ’18, and Q4 ’17, with DCF hitting records in Q3 ’17 through Q2 ’18:

With the unit count flat, and distributions/unit rising just 3.24%, HMLP’s coverage expanded by 9.11% over the past four quarters, as DCF grew 21.34%:

HMLP has two operating segments – majority held FSRUs, which contributed $58.58M in segment EBITDA for Q1 -2 ’18; and joint venture FSRUs, which contributed $16.39M in segment EBITDA for the same period.

Risks:

Boil-off issue – As we reported previously, HMLP has a “boil-off” problem. This still hadn’t been resolved, as of 5/31/18, when they reported Q1 2018 earnings. The charterer of the Neptune and Suez Cape Ann vessels filed a claim vs. these vessels, for excessive, past “boil-off.” The vessels are allowed a certain amount of LNG boil-off, (it’s related to gas which is ultimately being lost during a passage – in this case, it was when the vessels were being used for LNG transport years ago, before they were converted to FSRUs), but the charterer claims that they didn’t meet the performance standards for their contracts. HMLP’s 50% share of the accrual was approximately $11.9 million as of June 30, 2018.

However, HMLP is being indemnified by its parent company HLNG.

Management updated this info on the Q2 ’18 earnings call:

“The process has been a bit in limbo during the transition between NG and Total, but I think now Total have closed that transaction. We should be able to come to some kind of agreement on that in relatively short order.

But just to repeat again it’s not something will have an impact on the MLP.”

EGAS Gallant contract:

“EGAS has requested to start a discussion with Hoegh LNG over terms for the termination of the Gallant contract in advance of its April 2020 maturity. And that’s something that would require HLNG consent and compensation. From an HMLP point of view, should HLNG discontinue the charter of Gallant through its Egyptian subsidiary for the purposes of serving the EGAS contract, HMLP has the options to charter the Gallant to HLNG until 2025 at a rate, which is equal to 90% of its current rate. Whether it would in April 2020 or sooner, HMLP current exercised its options. If it does, the impact would negatively impact results over the current levels of distributable cash flow of over $17 million per quarter. The impact will be small enough to maintain a comfortable coverage ratio.”

Management updated this issue on the Q2 earnings call:

“I’d say that at least at the moment the discussions are quite good spirited. And I’m sure we’ll come to something, some kind of agreement. I mean they – I do want to take down to one FSRU that was clear they have got a lot of gas coming online. So that’s their need. And we’ve obviously got a contract in place.”

Tailwinds:

HMLP’s parent, HLNG, has additional FSRUs which it could eventually drop down to HMLP. However, it has been involved in lengthy contracting talks for some of its vessels. Management has previously indicated that they’d like to acquire a dropdown asset at least once each year.

The Independence vessel appears to be the next dropdown candidate. However, on the Q2 ’18 call, management said that,

“it’s difficult to see another drop down this year, not impossible, but difficult. Beyond that we’re obviously working very hard to make a few things come together. The Independence is possible. The projects in Australia, which the parents have been working on, that one solidifies, is possible. And then there is also a few other things out there which aren’t in the public domain that also would be possible.”

(Source: HMLP site)

Analysts’ Price Targets:

At $18.25, HMLP common units are 4.45% below the lowest price target of $19.10, and 12.09% below the average $20.76 price target.

Performance:

Like many other shipping stocks, HMLP has been underperforming the market in 2018, although it has outperformed the benchmark Claymore/Delta Global Shipping ETF (SEA).

Valuations:

HMLP has a slightly lower, but still very attractive yield, and better distribution coverage than other LNG carriers. It seems to be getting a slight premium for its better coverage in its price/DCF and price/book valuations.

Financials:

This is good to see – HMLP’s ROA, ROE, current ratio, and operating margin have all improved over the past few quarters, while its debt leverage has become much lower.

Management has chopped net debt/EBITDA down from a 5.1X level as of 9/30/17, to a 3.5X level, which is much lower than the 5.41X industry average.

Debt and Liquidity:

The balance on HMLP’s revolving credit facility line will be further reduced in Q3 ’18, as a result of a $6M repayment made after the close of Q2 ’18.

As of June 30, 2018, HMLP had cash and cash equivalents of $21.0M and an undrawn portion of $39.7M of the $85M revolving credit facility.

(The left column is as of 6/30/18, and the right column is as of 12/31/17.)

(Source: HMLP site)

Options:

HMLP doesn’t have options, but you can see over 25 other trades daily in our public Covered Calls Table and over 30 trades in our Cash Secured Puts Table.

Summary:

We rate HMLP a buy, based upon its attractive, well-covered yield, and conservative debt management.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

CLARIFICATION: We have two investing services. Our legacy service, DoubleDividendStocks, has focused on selling options on dividend stocks since 2009.

Our Marketplace service, Hidden Dividend Stocks Plus, focuses on undercovered, undervalued income vehicles, and special high yield situations.

We scour the US and world markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

These stocks are often small cap, low beta equities that offer stronger price protection vs. market volatility.

We publish exclusive articles each week with investing ideas for the HDS+ site that you won’t see anywhere else.

Disclosure: I am/we are long HMLP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[awesomecolorfulcollectorwombat]

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

New Post has been published on http://team77.com/a-9-6-yield-no-k-1-record-earnings-again-for-niche-leader/

A 9.6% Yield, No K-1, Record Earnings Again For Niche Leader

Looking for a solid, high-yield niche play? Maybe you should consider Hoegh LNG Partners LP (HMLP), the only publicly traded pure play on FSRUs.

FSRU stands for “Floating Storage & Regasification Unit,” and it’s a rapidly growing presence in the LNG shipping industry. HMLP’s parent/sponsor, Höegh LNG Holdings Ltd., is the largest provider of FSRUs in the market.

FSRU leasing/chartering solves many problems for charterer companies and countries. It’s slow and expensive to build an LNG import terminal, so FSRUs are being increasingly used to give countries access to LNG.

Like many of the firms we cover, HMLP operates on long-term contracts – its current average is 10.75 years for its five-vessel fleet, which includes two JV vessels. This is among the longest contract tenures that we’ve run across in the shipping industry.

(Source: HMLP site)

Common Distributions:

HMLP pays in a Feb-May-Aug-Nov. cycle and should go ex-dividend again in early November. At $18.25, the common units yield 9.64%.

Common unit coverage rose to 1.22X in Q2 ’18, which is the highest coverage level since HMLP’s IPO. Coverage has averaged 1.16X over the past four quarters:

Taxes:

Since it’s a C-Corp, HMLP issues a 1099 at tax time:

“The Partnership has elected to be treated as a C-Corporation for tax purposes (our investors receive the standard 1099 form and not a K-1 form).”

“Distributions we pay to U.S. unit holders will be treated as a dividend for U.S. federal income tax purposes, to the extent the distributions come from earnings and profits (“E&P”) and as a non-dividend distribution or a return of capital (“ROC”) to the extent the distributions exceed E&P.” (Source: HMLP site)

In 2017, HMLP’s ROC ranged between $.188 and $.1979 per quarterly payout. Investors get the benefit of sheltered income, but ROC does decrease your basis, so take a look at this if you’re thinking of selling at some point down the road.

Management has had distribution increases of 4.2% and 2.3% over the past two years, while coverage has been over 1X since Q2 ’16:

(Source: HMLP site)

Preferred Distributions:

HMLP also has a preferred series, Hoegh LNG Partners LP 8.75% Cumulative Perpetual Redeemable Units Series A (HMLP.PA). These are cumulative preferred units which offer you the additional protection of knowing that management must pay you any skipped distributions before it pays the common units. These units also rank senior to the common units in the event of a liquidation.

At $25.55, these preferred units yield 8.56%.

There’s no maturity date, but the call date is 10/5/22, after which HMLP can redeem if they so desire. This table details the annualized yield to this call date, if they were to be redeemed on 10/5/22. That yield is 7.79%, a bit lower than the current yield, since these units are $.55 above the $25.00 call value:

As is usually the case, these preferred units have a much higher coverage factor than the common units. Coverage has averaged 7.59 so far in 2018, on a net income basis, and 6.42X on a DCF basis:

Earnings:

HMLP has had strong growth in EBITDA, DCF, and net income over the past three quarters, with EBITDA up 24.72%, DCF up 17.81%, and net income up 56.07% in Q2 ’18. The 56% jump in net income is due to HMLP owning 100% of the Höegh Grace vessel in 2018, vs. only 51% in 2017.

Sequentially, HMLP also had record EBITDA, in Q2 ’18, Q1 ’18, and Q4 ’17, with DCF hitting records in Q3 ’17 through Q2 ’18:

With the unit count flat, and distributions/unit rising just 3.24%, HMLP’s coverage expanded by 9.11% over the past four quarters, as DCF grew 21.34%:

HMLP has two operating segments – majority held FSRUs, which contributed $58.58M in segment EBITDA for Q1 -2 ’18; and joint venture FSRUs, which contributed $16.39M in segment EBITDA for the same period.

Risks:

Boil-off issue – As we reported previously, HMLP has a “boil-off” problem. This still hadn’t been resolved, as of 5/31/18, when they reported Q1 2018 earnings. The charterer of the Neptune and Suez Cape Ann vessels filed a claim vs. these vessels, for excessive, past “boil-off.” The vessels are allowed a certain amount of LNG boil-off, (it’s related to gas which is ultimately being lost during a passage – in this case, it was when the vessels were being used for LNG transport years ago, before they were converted to FSRUs), but the charterer claims that they didn’t meet the performance standards for their contracts. HMLP’s 50% share of the accrual was approximately $11.9 million as of June 30, 2018.

However, HMLP is being indemnified by its parent company HLNG.

Management updated this info on the Q2 ’18 earnings call:

“The process has been a bit in limbo during the transition between NG and Total, but I think now Total have closed that transaction. We should be able to come to some kind of agreement on that in relatively short order.

But just to repeat again it’s not something will have an impact on the MLP.”

EGAS Gallant contract:

“EGAS has requested to start a discussion with Hoegh LNG over terms for the termination of the Gallant contract in advance of its April 2020 maturity. And that’s something that would require HLNG consent and compensation. From an HMLP point of view, should HLNG discontinue the charter of Gallant through its Egyptian subsidiary for the purposes of serving the EGAS contract, HMLP has the options to charter the Gallant to HLNG until 2025 at a rate, which is equal to 90% of its current rate. Whether it would in April 2020 or sooner, HMLP current exercised its options. If it does, the impact would negatively impact results over the current levels of distributable cash flow of over $17 million per quarter. The impact will be small enough to maintain a comfortable coverage ratio.”

Management updated this issue on the Q2 earnings call:

“I’d say that at least at the moment the discussions are quite good spirited. And I’m sure we’ll come to something, some kind of agreement. I mean they – I do want to take down to one FSRU that was clear they have got a lot of gas coming online. So that’s their need. And we’ve obviously got a contract in place.”

Tailwinds:

HMLP’s parent, HLNG, has additional FSRUs which it could eventually drop down to HMLP. However, it has been involved in lengthy contracting talks for some of its vessels. Management has previously indicated that they’d like to acquire a dropdown asset at least once each year.

The Independence vessel appears to be the next dropdown candidate. However, on the Q2 ’18 call, management said that,

“it’s difficult to see another drop down this year, not impossible, but difficult. Beyond that we’re obviously working very hard to make a few things come together. The Independence is possible. The projects in Australia, which the parents have been working on, that one solidifies, is possible. And then there is also a few other things out there which aren’t in the public domain that also would be possible.”

(Source: HMLP site)

Analysts’ Price Targets:

At $18.25, HMLP common units are 4.45% below the lowest price target of $19.10, and 12.09% below the average $20.76 price target.

Performance:

Like many other shipping stocks, HMLP has been underperforming the market in 2018, although it has outperformed the benchmark Claymore/Delta Global Shipping ETF (SEA).

Valuations:

HMLP has a slightly lower, but still very attractive yield, and better distribution coverage than other LNG carriers. It seems to be getting a slight premium for its better coverage in its price/DCF and price/book valuations.

Financials:

This is good to see – HMLP’s ROA, ROE, current ratio, and operating margin have all improved over the past few quarters, while its debt leverage has become much lower.

Management has chopped net debt/EBITDA down from a 5.1X level as of 9/30/17, to a 3.5X level, which is much lower than the 5.41X industry average.

Debt and Liquidity:

The balance on HMLP’s revolving credit facility line will be further reduced in Q3 ’18, as a result of a $6M repayment made after the close of Q2 ’18.

As of June 30, 2018, HMLP had cash and cash equivalents of $21.0M and an undrawn portion of $39.7M of the $85M revolving credit facility.

(The left column is as of 6/30/18, and the right column is as of 12/31/17.)

(Source: HMLP site)

Options:

HMLP doesn’t have options, but you can see over 25 other trades daily in our public Covered Calls Table and over 30 trades in our Cash Secured Puts Table.

Summary:

We rate HMLP a buy, based upon its attractive, well-covered yield, and conservative debt management.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

CLARIFICATION: We have two investing services. Our legacy service, DoubleDividendStocks, has focused on selling options on dividend stocks since 2009.

Our Marketplace service, Hidden Dividend Stocks Plus, focuses on undercovered, undervalued income vehicles, and special high yield situations.

We scour the US and world markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

These stocks are often small cap, low beta equities that offer stronger price protection vs. market volatility.

We publish exclusive articles each week with investing ideas for the HDS+ site that you won’t see anywhere else.

Disclosure: I am/we are long HMLP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.