The 2013 All-America Research Team: Master Limited Partnerships, No. 3: Michael Blum

Michael Blum
Wells Fargo Securities

First-place appearances: 0

Total appearances: 3

Analyst debut: 2009

Michael Blum of Wells Fargo Securities advances one position to third place. “No one covers master limited partnerships as broadly and as thoroughly as Mike,” lauds one investor. The analyst is positive overall on the sector, citing continued demand for additional infrastructure prompted by the U.S. shale boom. “You have all this new supply that’s emerging in areas that don’t have enough infrastructure, and the MLPs have been the primary players in the market building that infrastructure,” explains Blum, who adds that he’s forecasting 5 to 7 percent annual distribution increases for several years as a result. Also, MLPs “still offer one of the most attractive yields of any asset class out there, along with the significant tax benefits of owning them,” he believes, even if interest rates do rise over the next few years. His recommendations include fee-based MLPs with above-average, multiyear expansion profiles that combine low-risk cash flow with very high growth. Examples include Pittsburgh-based EQT Midstream Partners and Houston’s Genesis Energy. Blum also favors publicly traded general partners, such as Pittsburgh’s Atlas Energy and Energy Transfer Equity of Dallas, that have “very high growth in their distribution, plus the upside potential around transactions or restructurings at the MLP level that typically greatly benefit the general partner,” he maintains. — Carolyn Koo

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