Master Limited Partnerships: 2018 and Beyond

After all the bankruptcies, restructurings, and share dilutions in the MLP sector during the 2014-2017 fall in the price of oil, I decided to take a close look at the balance sheets of these companies to determine which ones had seemingly learned their lessons and were better prepared for the next cycle’s pricing declines in the price of oil and other natural resource commodities.

Upon reviewing the top fifteen MLPs by market capitalization, I gave up on the exercise. I don’t think you could make the argument that any of the top fifteen MLPs could survive $50 per barrel oil without cutting their distributions to unitholders, and many of them would repeat the … Read the rest of this article!

The Beat Goes On At Patreon

I am excited to announce that I have become a Creator at Patreon where I will provide regular updates concerning available opportunities aimed at helping you and your family build wealth, with a particular emphasis on high income stocks and the very high-quality blue chips that have been the regular subject of articles on The Conservative Income Investor. Other areas of minor emphasis will include case studies in dumb behavior not to emulate, typical investments that have a hidden or not widely-discussed risk, and even articles on convertible stocks which let you collect income upfront and convert into common stock at a certain ratio that can be conducive to an investor that wants … Read the rest of this article!

Kraft Heinz Dividend Predictions Through 2023

Kraft-Heinz has excellent operating subsidiaries. The Heinz ketchup brand, launched shortly after the American Civil War, has a near monopoly on the American ketchup industry that has been untouched for over two centuries. If it were still a standalone company, it would be one of the top two dozen businesses in the world that you could hold for a 50+ year time frame. Since 2015, it has been merged with Kraft, giving the combined company a towering position in the cheese, ketchup, and grocery store meats categories.

But when you intend to build wealth, using a largely passive approach where you are maniacal in your analysis on the front-end of getting the decision … Read the rest of this article!

Bill Ackman Wants United Technologies To Split Off Into Three Companies

The activist investors Bill Ackman and Dan Loeb are calling for the break-up of United Technologies into three publicly traded companies–the aerospace, the elevator, and the climate-control units.

Ackman offered the following comments to the press: “Other than Berkshire Hathaway, conglomerates have not had a great track record.”

That comment is bizarre because United Technologies, the company he wants to break up, is an example of a conglomerate delivering exceptional returns. It has a forty-year track record of 15% annual compounding, turning every $1 into $340. Put $25,000 into United Technologies back in the day? Boom, $8.5 million today. Even over the past decade, the compounding has occurred at a rate of 8% Read the rest of this article!

The PepsiCo Spinoff of Yum Brands: Twenty-Year Review

Back in the 1990s, Pepsi had its hand in every cookie jar. It not only had its beverage lineup led by Pepsi, Diet Pepsi, Mountain Dew, and (before later selling it off) Schweppes, but also had branched out into food as well. In addition to the well-known Frito-Lay acquisition that turned it into a colossal source of snack profits, PepsiCo shareholders also had an entrenched interest in the fast food business, having held full ownership of KFC, Pizza Hut, and Taco Bell.

In September of 1997, Pepsi’s Board of Directors decided that it would spinoff Tricon Global Brands (YUM’s original name) with each Pepsi shareholder receiving 1 share of Tricon for every 10 Read the rest of this article!