AMLP
AMLP
Hold 2026-03-17
Model
DDM
Price at Report
$52.31
Base IV
$55.69
Bear IV
$46.30
Bull IV
$63.26
Entry Zone: 49-51 · Sell Above: 54
Bore Family Office
Valuation Report — Alerian MLP ETF (AMLP) • March 17, 2026
3-Stage DDM (Ke) • Discount Rate: 10.00% • Current Price: $52.31
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
The Alerian MLP ETF (AMLP) tracks the Alerian MLP Infrastructure Index (AMZI), a capped, float-adjusted, capitalization-weighted index of energy infrastructure Master Limited Partnerships. The fund holds 14 MLPs with a combined AUM of approximately $10B, making it the largest MLP ETF by assets. Top holdings include Plains All American Pipeline (12.8%), Sunoco LP (12.6%), Enterprise Products Partners (12.1%), Energy Transfer (12.1%), and MPLX LP (11.4%) — all large-cap, investment-grade midstream operators.
AMLP is structured as a C-corporation (not a Regulated Investment Company), which means it pays corporate taxes on realized and unrealized gains but distributes a single Form 1099 (not K-1s), simplifying tax reporting for investors. This structure creates a ~21% tax drag on capital appreciation but the trade-off — accessibility, simplicity, margin eligibility, and IRA compatibility — makes AMLP the preferred vehicle for most retail MLP investors. The fund has delivered 7.6% yield with 4.5% distribution growth in the trailing year, driven by the robust financial health of its underlying midstream portfolio.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Plains All American Pipeline (PAA) | $0M | 13% | +3.0% | — | 12.81% weight; crude oil pipelines & NGL fractionation; 3%/yr distribution growth |
| Sunoco LP (SUN) | $0M | 13% | +4.0% | — | 12.64% weight; fuel distribution & convenience; growing via acquisitions |
| Enterprise Products Partners (EPD) | $0M | 12% | +3.5% | — | 12.13% weight; 26-yr distribution growth streak; NGL/gas/oil pipelines; buy-rated |
| Energy Transfer LP (ET) | $0M | 12% | +4.0% | — | 12.07% weight; 3-5%/yr distribution growth target; largest midstream network |
| MPLX LP (MPLX) | $0M | 11% | +4.5% | — | 11.35% weight; Marathon Petroleum affiliate; 4-5%/yr distribution growth |
| Other 9 Holdings | $0M | 39% | +3.5% | — | TRGP, WES, DKL, KMI, others; blended ~3.5% distribution growth |
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $3 | $3 | $3 | $4 | $4 |
| EBITDA ($M) | $3 | $3 | $3 | $4 | $4 |
| Operating Income ($M) | $3 | $3 | $3 | $4 | $4 |
| Net Income ($M) | $3 | $3 | $3 | $4 | $4 |
| EPS (diluted) | $2.82 | $2.93 | $3.34 | $3.71 | $3.97 |
| Free Cash Flow ($M) | $3 | $3 | $3 | $4 | $4 |
| Annual DPS | $2.820 | $2.930 | $3.340 | $3.710 | $3.970 |
| Total Debt ($M) | $0 | $0 | $0 | $0 | $0 |
| Rev YoY Growth | — | +3.9% | +14.0% | +11.1% | +7.0% |
| EBITDA Margin | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
| Operating Margin | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
| Net Margin | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.550 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 10.00% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 0.00% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 0.00% | × (1 − 0%) |
| Weight Equity (We) | 100.0% | Mkt cap $0.0B |
| Weight Debt (Wd) | 0.0% | Gross debt see we/wd |
| WACC | 7.28% | DCF discount rate |
📈 DDM Scenarios
$46
🔴 Bear
$56
📊 Base
$63
🚀 Bull
$52.31
Current Price
$57
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 1.5% | 1.0% | 1.0% | 10.00% | $46 | ▼11.5% |
| 📊 Base | 3.5% | 2.5% | 2.0% | 10.00% | $56 | ▲6.5% |
| 🚀 Bull | 5.0% | 3.5% | 2.5% | 10.00% | $63 | ▲20.9% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 1.5% | Stage 2: 1.0% | Terminal: 1.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $4.101 | $3.728 | $3.73 |
| Year 2 | Stage 1 | $4.162 | $3.440 | $7.17 |
| Year 3 | Stage 1 | $4.225 | $3.174 | $10.34 |
| Year 4 | Stage 1 | $4.288 | $2.929 | $13.27 |
| Year 5 | Stage 1 | $4.352 | $2.702 | $15.97 |
| Year 6 | Stage 2 | $4.396 | $2.481 | $18.45 |
| Year 7 | Stage 2 | $4.440 | $2.278 | $20.73 |
| Year 8 | Stage 2 | $4.484 | $2.092 | $22.82 |
| Year 9 | Stage 2 | $4.529 | $1.921 | $24.74 |
| Year 10 | Stage 2 | $4.574 | $1.764 | $26.51 |
| Terminal | — | TV=$51.33 | PV(TV)=$19.79 (43% of IV) |
Base Scenario
Stage 1: 3.5% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $4.181 | $3.801 | $3.80 |
| Year 2 | Stage 1 | $4.328 | $3.577 | $7.38 |
| Year 3 | Stage 1 | $4.479 | $3.365 | $10.74 |
| Year 4 | Stage 1 | $4.636 | $3.166 | $13.91 |
| Year 5 | Stage 1 | $4.798 | $2.979 | $16.89 |
| Year 6 | Stage 2 | $4.918 | $2.776 | $19.67 |
| Year 7 | Stage 2 | $5.041 | $2.587 | $22.25 |
| Year 8 | Stage 2 | $5.167 | $2.411 | $24.66 |
| Year 9 | Stage 2 | $5.296 | $2.246 | $26.91 |
| Year 10 | Stage 2 | $5.429 | $2.093 | $29.00 |
| Terminal | — | TV=$69.22 | PV(TV)=$26.69 (48% of IV) |
Bull Scenario
Stage 1: 5.0% | Stage 2: 3.5% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $4.242 | $3.856 | $3.86 |
| Year 2 | Stage 1 | $4.454 | $3.681 | $7.54 |
| Year 3 | Stage 1 | $4.677 | $3.514 | $11.05 |
| Year 4 | Stage 1 | $4.911 | $3.354 | $14.41 |
| Year 5 | Stage 1 | $5.156 | $3.202 | $17.61 |
| Year 6 | Stage 2 | $5.337 | $3.012 | $20.62 |
| Year 7 | Stage 2 | $5.523 | $2.834 | $23.45 |
| Year 8 | Stage 2 | $5.717 | $2.667 | $26.12 |
| Year 9 | Stage 2 | $5.917 | $2.509 | $28.63 |
| Year 10 | Stage 2 | $6.124 | $2.361 | $30.99 |
| Terminal | — | TV=$83.69 | PV(TV)=$32.27 (51% of IV) |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.0% | $71 | $75 | $79 | $84 | $90 |
| 8.5% | $66 | $69 | $72 | $76 | $81 |
| 9.0% | $61 | $64 | $67 | $70 | $74 |
| 9.5% | $57 | $59 | $62 | $64 | $67 |
| 10.0% | $54 | $56 | $58 | $60 | $62 |
| 10.5% | $51 | $52 | $54 | $56 | $58 |
| 11.0% | $48 | $49 | $51 | $52 | $54 |
| 11.5% | $46 | $47 | $48 | $49 | $51 |
| 12.0% | $43 | $44 | $45 | $47 | $48 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Fund/Security | Yield | Distribution Growth | Expense Ratio | 1-yr Total Return |
|---|---|---|---|---|
| AMLP (Alerian MLP ETF) | 7.59% | +4.5% | 0.85% | ~22% |
| MLPA (Global X MLP ETF) | 7.2% | +3.8% | 0.45% | ~20% |
| MLPX (Global X MLP & Energy) | 5.9% | +4.2% | 0.45% | ~21% |
| EPD (Enterprise Products) | 6.8% | +3.5% | N/A | ~18% |
| ET (Energy Transfer) | 6.7% | +4.0% | N/A | ~25% |
| AGG (Bond Index — for context) | 4.5% | 0% | 0.03% | ~4% |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $4.040 |
| Current Yield | 7.59% |
| Consecutive Growth Years | 5 |
| 1-yr DPS CAGR | +4.5% |
| 3-yr DPS CAGR | +6.2% |
| 5-yr DPS CAGR | +7.3% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 102.1% ⚠️ |
| FCF Payout Ratio | 102.1% ⚠️ |
| Sustainability Verdict | Safe |
AMLP distributions are backed by the underlying MLP portfolio distributions, which have coverage ratios of 1.7-2.0× across the 14 holdings. The ETF pays out essentially all income received. Distribution sustainability is HIGH — underlying MLPs are generating record DCF (Distributable Cash Flow) with strong coverage. The C-corp tax structure creates a slight NAV drag on capital appreciation but does NOT impair current distribution flow. With EPD (26-yr streak), ET (growing 3-5%/yr), and MPLX (4-5%/yr growth) as top holdings, the distribution trajectory is compelling.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $2.93 | — | — | — | Actual |
| 2023 | $3.34 | — | — | — | Actual |
| 2024 | $3.71 | — | — | — | Actual |
| 2025 | $3.97 | — | — | — | Actual |
| 2026 | $3.90 | $4.04 | $4.30 | 3 | Estimate |
| 2027 | $4.10 | $4.24 | $4.55 | 3 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $0.6B | — | — | — | Actual |
| 2023 | $0.6B | — | — | — | Actual |
| 2024 | $0.7B | — | — | — | Actual |
| 2025 | $0.8B | — | — | — | Actual |
| 2026 | $0.7B | $0.8B | $0.8B | 3 | Estimate |
| 2027 | $0.8B | $0.8B | $0.9B | 3 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| ETF Research (Alerian) | VettaFi/Alerian | Hold/Accumulate | $57 | +9.0% |
| ETF Analyst (internal) | ALPS Advisors | Index Fund | $55 | +5.1% |
💡 Investment Thesis
- AI power demand = natural gas volume surge: Data centers require massive, uninterruptible electricity generation; natural gas is the bridge fuel. AMLP's underlying MLPs own critical gas transmission and processing infrastructure — volume growth translates directly to higher distributions with minimal commodity risk (fee-based contracts dominate). This is the most underappreciated catalyst.
- 7.6% yield with growth: At $52.31, AMLP yields 7.59% with 4.5% distribution growth — a rare combination. The 1099 structure (vs K-1) eliminates tax friction, making AMLP the cleanest high-yield energy vehicle for taxable accounts.
- Underlying MLPs are financially fortress-like: EPD, ET, MPLX generate free cash flow well in excess of distributions at $40/bbl oil. Coverage ratios average 1.7-2.0× across the portfolio. Distribution safety is extremely high.
- LNG export tailwind: Golden Pass, Plaquemines, and other new LNG export terminals (coming online 2025-2027) directly benefit AMLP's gas pipeline holdings; incremental volumes are high-margin and long-term contracted.
- Trades at slight discount to NAV: C-corp structure creates a permanent discount to NAV due to deferred tax liability, but distributions are NOT tax-impaired — investors collect full pre-tax distributions. Valuation reset risk is limited.
⚖️ DDM Verdict: Hold — Alerian MLP ETF (AMLP)
Current price: $52.31 | Analyst Avg PT: $57.00
$46
🔴 Bear
$56
📊 Base
$63
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$51 | Begin position |
| Tier 2 — Add | ≤$51 | Add on weakness |
| Tier 3 — Full | ≤$49 | Full allocation |
| Sell Alert | ≥$54 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Accumulate AMLP at $50–53. The combination of a 7.6% yield, 4%+ distribution growth, AI/LNG tailwinds, and fortress-balance-sheet underlying operators makes this one of the strongest risk/reward income vehicles available. Base case IV of ~$57 (+9% from current) plus the 7.6% distribution yield = total return potential of 16%+ over 12 months. Full position at $48–50 if we get a pullback. Becomes a Reduce above $63 (distribution yield below 6.4% would indicate overpayment relative to investment-grade bonds).
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Choice | DDM using distribution/share as base. AMLP is an ETF that passes through MLP distributions (net of 0.85% expense ratio). Distribution growth is directly tied to underlying MLP distribution growth guidance. |
| Ke Build | Rf=4.25%, β=0.55 (Finnhub; energy infrastructure ETF, lower than E&P), ERP=5.5% → Ke=7.275%. MLPs/midstream have lower beta than E&P due to fee-based contracts and non-commodity revenue. |
| Distribution Base | Used $4.04 (forward annualized $1.01/qtr × 4 from Q1 2026 declared distribution). This is the most conservative base — Q1 2026 growth of 1% QoQ implies management expects continued distribution growth. |
| Growth Rates | Base 4.0%/yr — weighted average of underlying MLP distribution guidance: EPD 3-4%, ET 3-5%, MPLX 4-5%, PAA ~3%. Net of 0.85% expense ratio drag. AI/LNG demand provides upside to these guidance numbers. |
| C-Corp Tax Note | AMLP's C-corp structure means deferred tax liabilities accrue on unrealized gains, creating a ~21% overhang on NAV. This affects price appreciation but NOT current distributions. The DDM correctly values the distributable income stream, not the tax-adjusted NAV. Investors should expect AMLP to trade at a slight persistent discount to the sum-of-parts of underlying MLPs. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.