Pioneer Natural Resources (PXD), Pioneer Southwest Energy Partners L.P. (PSE) Downgrades are an Entry Opportunity

Competitor Mid-Con Energy Partners LP (NASDAQ:MCEP) is another oil and gas producing MLP that offers an attractive and growing dividend. At its current price, Mid-Con’s yield is about 9%, and the partnership has steadily increased its dividend about a penny per quarter since the middle of 2012. What keeps me from getting too excited about Mid-Con is it’s age. The partnership has an impressive TTM Operating Margin of 58.63%, but it has only been operating for about a year and a half. If Mid-Con can maintain its impressive growth for a few more years, it will be one of the most attractive MLPs around. For now, I consider it a highly speculative play that is worth keeping an eye on.

Also relatively young, Pioneer Southwest has been paying dividends since 2008, and hasn’t missed or decreased its distribution since. Sighnolfi was right to note that dividend growth has only risen by 4% over the past 4 years, and I think he was also correct about the partnership not being worth the premium, that its share price was demanding before his downgrade. Since his comments, however, shares of Pioneer Southwest have fallen to a level that makes it much more attractive.

The article Pioneer Southwest Downgrades are an Entry Opportunity originally appeared on Fool.com and is written by Cory Renauer.

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