Genesis Energy LP (NYSE:GEL) is a Master Limited Partnership (MLP) providing transport, refining, storage and other energy related services to its customers. The stock also pays a significant distribution for those investors looking for income.

IN PICTURES: 7 Tools Of The Trade

Pipeline Transportation
Genesis Energy LP received $46 million in operating income from the Pipeline Transportation segment in the 12 months ending Sept 30, 2010. The company owns four separate pipeline networks running approximately 425 miles across Texas, Alabama, Mississippi and Florida. These are used to transport crude oil, and Genesis Energy LP also owns approximately 900,000 barrels of above-ground storage facilities in these networks.

Genesis Energy LP owns 269 miles of pipeline used to transport carbon dioxide, including the Northeast Jackson Dome pipeline, which brings carbon dioxide to oil fields undergoing tertiary recovery.

Genesis Energy LP has a 20-year lease with Denbury Resources (NYSE:DNR) to supply carbon dioxide to the company's fields in Mississippi. Denbury Resources used to own the general partner of Genesis Energy LP and sold it in February 2010.

Refinery Services
Genesis Energy LP produced $59 million in operating income from the Refinery Services segment in the 12 months ending Sept 30, 2010. This company uses caustic soda to remove sulfur from natural gas during the refining process. This process generates large amounts of sodium hydrosulfide, which the company sells to customers in the mining, paper and pulp industries. The company's customers include International Paper (NYSE:IP) and BHP Billiton (NYSE:BHP)

Supply and Logistics
Genesis Energy LP also has a large supply and logistics business which generated $29 million in operating income in the 12 months ending Sept 30, 2010. The company owns crude oil and refined products storage and transportation assets here, including trucks and barges.

Industrial Gases
Genesis Energy LP is also involved in the industrial gas business and reported $12 million in operating income here in the 12 months ending Sept 30, 2010. The company sells carbon dioxide to customers for industrial uses including beverage carbonation.

CHOPS
Genesis Energy LP recently announced the purchase of a 50% interest in the Cameron Highway Oil Pipeline Company (CHOPS) from Valero (NYSE:VLO). The operator of CHOPS is Enterprise Products Partners, L.P. (NYSE:EPD), which also owns the other 50%.

CHOPS is a 380 mile pipeline segment that transports crude oil from the Gulf of Mexico to refineries in the Gulf Coast region. The pipeline has a capacity of 500,000 barrels per day and will give the company exposure to growing production from offshore developments in the gulf area.

High Yield
Genesis Energy LP also paid a distribution of $1.55 out to investors over the last four quarters, giving a yield of 6.4%. The company has increased its distribution for 21 consecutive quarters.

The Bottom Line
Genesis Energy LP is involved in the transport, refining, and storage of crude oil and natural gas and also comes with a high yield for those that need some cash flow. (Find out how to stay on top of data reports that could cause volatility in these markets. See Become An Oil And Gas Futures Detective.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Investing

    Build a Retirement Portfolio for a Different World

    When it comes to retirement rules of thumb, the financial industry is experiencing new guidelines and the new rules for navigating retirement.
  2. Forex Strategies

    Two Great Currencies To Profit From Oil Volatility

    U.S. dollar crosses with Canadian and Australian dollars offer easy access to crude oil trends due to their tight correlation with energy futures.
  3. Investing

    Redefining the Stop-Loss

    Using Stop-losses for trading doesn’t mean ‘losing money’, but instead think about the money you'll start saving once you learn how they work.
  4. Fundamental Analysis

    10 Major Companies Tied to the Apple Supply Chain

    Apple has one of the best supply-chain models. Here are some of the top businesses involved, and the benefits and challenges for all.
  5. Markets

    The 5 Biggest Chinese Natural Gas Companies

    Read about the top five Chinese natural gas companies as measured by gas production volume and learn a little more about their business operations.
  6. Options & Futures

    Analyzing The 5 Most Liquid Commodity Futures

    Crude oil leads the pack as the most liquid commodity futures market, followed by corn and natural gas.
  7. Term

    What are Non-GAAP Earnings?

    Non-GAAP earnings are a company’s earnings that are not reported according to Generally Accepted Accounting Principles.
  8. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI US 1000

    Find out about the PowerShares FTSE RAFI U.S. 1000 ETF, and explore detailed analysis of the fund that invests in undervalued stocks.
  9. Options & Futures

    Use Options to Hedge Against Iron Ore Downslide

    Using iron ore options is a way to take advantage of a current downslide in iron ore prices, whether for producers or traders.
  10. Stock Analysis

    Fortinet: A Great Play on Cybersecurity

    Discover how a healthy product mix, large-business deal growth and the boom of the cybersecurity industry are all driving Fortinet profits.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  4. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
  5. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
  6. Net Present Value - NPV

    The difference between the present values of cash inflows and ...
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  5. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  6. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!