Dividend Yield: 8.2%
If USAC can be seen as a play on the safer end of the compression market, then Compressco Partners, LP (GSJK) can be used as a play on the risky side. GSJK focuses almost exclusively on the upstream market for natural gas. That means its smaller-horsepower pumps are subject to whims of actual natural gas exploration efforts.
So goes production from a single well, so goes GSJK’s earnings. Of course, that risk is mitigated by a high yield of more than 8%.
However, GSJK does have a nice ace up its sleeve — providing specialized compression equipment designed to improve flows in mature and dying fields. As we all know, many mature and legacy (read: “easy”) sources of energy are quickly drying up. By using GSJK’s products, E&P firms are able to squeeze out more production from the wells and improve their lifespan. Over the longer term, that should bolster GSJK’s cash flows and strengthen its dividend.
The bottom line for investors: There’s big money and dividend yield to be had if you put your natural gas holdings under some pressure.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.