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 exact same hardships that previously occurred.
The terms of investing in the large oil MLP market segment is analogous to this: “If the price of oil is high, you will collect fat quarterly distributions. If it is … Read the rest of this article!