After an E&P firm pulls oil out of the ground it needs to be stored before it can be refined. Likewise, after it’s turned into gasoline, jet fuel and other refined products, storage is necessary.
Filling the two parking places on the energy value chain is Oiltanking Partners (OILT). It earns steady and stable fees from energy producers to store their petroleum until its needed, making it one of our oddball dividend stocks for the energy sector.
And like their name suggests, OILT owns plenty of storage tanks and associated terminal assets.
OILT’s general partner — Oiltanking Group — is the world’s second-largest independent tank storage provider for petroleum products, chemicals and gases. That firm controls nearly 72 different terminals with about 121 million barrels of storage capacity throughout the world. OILT has benefited from that relationship through hefty asset “drop-downs.”
Those drop-downs have strengthened OILT’s already rich cash flows. This past quarter, Oiltanking Partners increased its quarterly payout by 5.6% versus the prior quarter’s distribution. OILT currently yield 3%, proving that there are riches in niches.