TYG - TYG: Improving Fundamentals And Strong Recent Performance
2024-06-25 17:37:40 ET
Summary
- Tortoise Energy Infrastructure Corporation is a closed-end fund providing exposure to midstream master limited partnerships and energy corporations.
- The TYG closed-end fund's yield of 8.44% is competitive but lower than some peers, but it compares very well to the market.
- Despite historically lagging, the TYG CEF has outperformed indices and peers recently.
- Recent reports indicate that the fundamentals for oil and gas are stronger than commonly believed, and that should benefit the securities held by this fund.
- The fund has a reasonable level of leverage and trades at a massive discount to net asset value.
Tortoise Energy Infrastructure Corporation ( TYG ) is a closed-end fund, or CEF, that investors can purchase as a way of adding exposure to midstream master limited partnerships and other midstream energy companies to their portfolios. As is the case with most midstream closed-end funds, this one allows the inclusion of energy partnerships into a tax-advantaged account without the tax hassles that can sometimes accompany this task. This is a very nice thing for retirees, since master limited partnerships have a number of characteristics that are quite attractive for individuals who require income.
In particular, most master limited partnerships enjoy remarkably stable cash flows and pay out fairly high yields. For example, the Alerian MLP Index ( AMLP ), which tracks an index of master limited partnerships, has a trailing twelve-month yield of 7.43% at its current level. This is far better than the yields that can be obtained from the major domestic stock indices:
TYG: Improving Fundamentals And Strong Recent Performance