Over the last five quarters, energy infrastructure companies have spent a combined $3.5 billion on equity repurchases and can build on this momentum. Buyback activity will fluctuate based on market conditions and competing capital needs, but repurchase authorizations remain an important tool for returning capital to shareholders, which should not change even with the 1% excise tax on buybacks in the Inflation Reduction Act. The excise tax does not appear to apply to MLPs and should not be a deterrent for corporations. Complementing generous dividends, buybacks are another way for companies to return capital to investors and may see greater utilization when market volatility creates enhanced opportunity.
AMZI is the underlying index for the Alerian MLP ETF (AMLP) and the ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB). AMNA is the underlying index for the ETRACS Alerian Midstream Energy Index ETN (AMNA). AMEI is the underlying index for the Alerian Energy Infrastructure ETF (ENFR) and the ALPS Alerian Energy Infrastructure Portfolio (ALEFX). AEDW is the underlying index for the Alerian Midstream Energy Dividend UCITS ETF (MMLP) and the ETRACS Alerian Midstream Energy High Dividend Index ETN (AMND).
Related Research:
2Q22 Midstream/MLP Dividends: Let the Good Times Roll
1Q22 Midstream Buybacks: Widespread Participation
MLPs Leading the Way for Midstream Buybacks in 4Q21
(1) Aggregate dollar amounts include Canadian dollars for the Canadian corporations with repurchase programs – Enbridge, Gibson Energy, and Pembina Pipeline Corporation.
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