Hi I'm Jimmy in this video we're looking at the top three dividend paying MLP its MLP is short for master limited partnership. So these three different paying stocks have strong coverage ratios and plenty of free cash flow coming in to continue to pay their dividends in the future. And then at the end of the video I actually got two bonus MLP dividend paying stocks that are quite good. I expect their dividends to be fairly consistent. They just weren't quite solid enough to make the top three list. Now I plan on doing a series of videos just like this where I try to find the top dividend paying stocks for each sector although MLPs aren't technically their own sector they tend to be very good dividend payers.
So I thought it made sense to start with these. This whole group. So if you have a preference for for which sector we might do next please let me know in the comments below. And if you're curious to learn more about MLPs please. Again in the comments because I've put together a few primers on closed end funds or REITs I've been considering doing an MLP primer if that's something you'd be interested in knowing about. Let me know. Basically what we need to know for this video is master limited partnerships tend to focus on the oil and gas market. They're usually involved in the shipping and delivery of both oil and gas and generally they have great dividends because they don't have to pay corporate income tax as long as they pass through their profits to the shareholders. Okay let's kick off our top three MLP list with the smallest company on our list and that's Magellan Midstream Partners ticker symbol MMP.
So MMP has a dividend yield of about 6 percent with the current price of about sixty six dollars per share and they have a dividend of almost four dollars. When we look at their dividends over the past four quarters this is a chart of Magellan dividend history and as we could see they have steadily increased their dividend every year an analyst estimates those that are running the green bars while they're ex that they're expecting for these dividends to continue an increase in the coming years.
Okay. So what does Magellan do. Well they own a lot of pipelines and they're in the early stages of building another pipeline down in Texas and they expect for this to be a good cash flow generator for them over the long run. Now one of the reasons I picked each of these three MLPs on our list is that they have fairly low exposure to oil and gas prices. Instead the majority of their revenue is generated from fees for shipping.
Not all of it but compared to the rest of the industry. Most of it is now Magellan is well positioned to bring in good amounts of cash flow with their current pipelines and this should ultimately lead to them being able to continue to increase their dividends at the end of the day free cash flow for these companies are the most important things. And since they're getting paid to ship it in a very active market down near Texas. Well I would expect for their profits to stay fairly consistent. Okay. Onto our next dividend paying stock. This is enterprise product partners ticker symbol EPD. So EPD is one of the largest MLPs out there and I like them. They're one of my favorite a mouthpiece because they control a ton of key assets so their assets what they control are crucial for their customers businesses. This allows for them to consistently bring in free cash flow and ultimately support their impressive dividend yield. This their dividend history and based on their dividends over the past 12 months which totaled to be about a dollar seventy five in their current price which is about twenty eight dollars and fifty cents.
Well once again their dividend yield ends up being about 6 percent. So clearly a lot of these companies have impressive dividend yields. Now one thing I like about EPD is that they recently signed a long term contract with Chevron and this is allowing for EPD to develop their seaport oil terminal which is on the Texas Gulf Coast. And this is likely to take a few years to build.
But knowing that they have a long term contract with Chevron makes it a lot easier to commit the one or two billion dollars it's going to cost them to build it. It's much easy to do that when you know you have waiting customers. I would expect for this 6 percent dividend yield to remain reliable and likely continue to increase going into 2020 and beyond. Okay now we jump over to our final MLP and then we're going to look quickly at the 2 bonus MLP that we have after them. Next up we have the TC Energy Corp ticker symbol TRP and as is true with the other two MLPs, the dividends for TRP have been very consistent and projections have the moving even higher over the next couple of years. So as you can imagine these are one of the main reasons that I wanted these three companies on this list. I believe these are three of the most reliable dividend payers out there. Now yes TC Energy has done a good job of increasing their dividends. And based on their dividends over the past year well their dividend yield is currently more than five and a half percent.
So another great dividend stock but they're in a slightly different position than the first two MLP. So TC energy has recently come off some they've sold some of their assets to try to reduce deleverage on their balance sheet. Now I'm not terribly concerned about this reduction in assets because they still got on as strong our natural gas pipeline that's growing fairly strongly. This should help keep their free cash flow strong enough to maintain their dividend. Now TC energy has been tied to the Keystone pipeline and I'm sure we've all heard the regulatory issues or the regulatory struggles tied to the Keystone pipeline. And this was hurting to see energy for a while but they've had a great 2019 since it seems that Keystone is moving in their favor from a regulatory standpoint. Okay. So those are the top three MLP that we have for very secure divisions.
Now we have two bonus companies that I also suspect will have fairly secure dividends for the next couple of years. But for some reason we thought that they fell behind these top three. So the first company is Kinder Morgan ticker symbol KMI now just like the other MLPs I expect for Kinder Morgan to do quite well since they're well positioned in the midstream market. So I did keep them off the top three list. Well this is a chart of their dividend history going back the past few years. And as we can see they're not nearly as stable as the companies we ultimately went with. Now I do believe that they will continue to grow their dividends. Analyst expectations seem to believe the same thing but they weren't quite good enough to make the top three list.
Kinder Morgan currently has a dividend yield of about four and a half percent. Okay. Onto our next company that's Plains All American ticker symbol PAA. So PAA recently went through a restructuring over the past few years and they cut their distributions quite a few times now. They're expected to continue to grow from here. And ultimately I think that they're 6 percent or so dividend yield is fairly stable. I think that they're in a fairly good position. I just wouldn't classify them quite as steady as the top three companies that we ultimately chose.
So what do you like do you like the top three MLP is that we ultimately decided to go with do you like the bonus companies who have a different MLP that you would prefer to hold for the long haul let me know what you think in the comments below. If you haven't done so yet please hit the subscribe button. Thank you so much for stick with me. Although it into the video and I'll see in the next video.
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