In 2014, we took all the energy MLPs and dumped them into a rectangle. We then broke the rectangle out into individual pieces labeled with the tickers of each company. The pieces were then sized according to each MLP’s relative market cap. This treemap allowed investors to get a snapshot of the MLP space in an easily digestible visual.
When taking a walk down memory lane last week, I ran across this map and realized a lot has changed since the 2014 treemap was created. For starters, Kinder Morgan Inc. (KMI) hadn’t yet rolled up its MLPs. The old Kinder Morgan Energy Partners (KMP) took up a sizeable chunk of the rectangle. Also, the two smallest MLPs that were mentioned at the time (Oxford Resource Partners and Central Energy Partners) are now dust in the wind. There were 116 MLPs reflected in the September 2014 treemaps. As of March 31, 2017, there are 108. Because of all these changes, I thought an updated treemap was in order. First, let’s look at a simple map of all 108 MLPs.
The total energy MLP market cap is around $400 billion. With a market cap of almost $60 billion, Enterprise Products Partners (EPD) is the largest MLP. Second is Williams Partners (WPZ) at approximately $25 billion. Notably, WPZ will not likely hold the title of second largest for much longer. Assuming the planned Energy Transfer Partners (ETP)/Sunoco Logistics Partners (SXL) merger is approved this week, the newly formed company will take the red ribbon.
The version of the treemap below highlights the tickers of the 44 companies that are constituents of the AMZ.
The AMZ market cap is about $336 billion, representing roughly 83% of the total MLP market cap. MLP GPs account for many of the larger holes in the block of orange. Such companies are excluded from index eligibility as explained in our methodology guide.
Next, we’ll look at the treemap with the MLPs divided by our size indices. The Alerian Large Cap MLP Index (AMLI) contains energy MLPs that have a market cap in the top 70% of total market cap. The Alerian Mid Cap MLP Index (AMMI) captures the next 20% and the Alerian Small Cap MLP Index (AMSI) is composed of the bottom 10%.
If you’re wondering why some of the boxes are greyed, there are a few reasons. Institutional shares, such as Enbridge Energy Management (EEQ), as well as taxable equivalent shares, such as Cheniere Energy Partners LP Holdings (CQH) and Plains GP Holdings (PAGP), are ineligible. Also, MLPs must have a market cap of at least $75 million to be included, which is why Atlas Energy Group (ATLS) and Rhino Resource Partners (RHNO) aren’t in the AMSI.
Finally, we’ll look at the age of the MLPs in our treemap.
Every now and then you’ll run across a photo or story that reminds you age is just a number. In many ways, this treemap backs that saying up (albeit not nearly as cool as a grandma who DJs). What I mean by this is it’s not necessarily the oldest MLPs that are the largest or the youngest MLPs that are the smallest. True, some MLPs like Magellan Midstream Partners (MMP) and Plains All American Pipeline (PAA) that have been around for 15+ years have grown a lot, but organic growth is not the only way to be a heavy hitter. Some MLPs started off larger thanks to being formed by a parent and receiving sizable dropdowns.
Have other ideas for interesting treemap variations? If so, tell us by emailing [email protected].