TGP

LNG Shipper: 9.6% Yield Common, 9.3% Yield Preferreds

This LNG shipping business has been improving, and there are reasons to believe the common units have significant price appreciation ahead. However, if you prefer a similar high yield without as much risk, you might also consider the preferred shares (they too offer price appreciation potential, just not as much). In particular, and despite the highly cyclical LNG shipping industry, this company has an impressive history and opportunity for consistency in the quarters and years ahead, stemming from its fully-fixed fleet for the remainder of this year and 94% fixed for 2021 (thereby largely insulating it from the current weak short-term LNG shipping market). In this article, we review the health of the business, cash flow position, balance sheet flexibility, valuation, risks, dividend safety, and conclude with our opinion about why company is worth considering if you are a long-term income-focused investor.