Inergy has consistently maintained over the past year that it has the funds and willpower to maintain the current payout rate of 70.5 cents a quarter. And over the past couple months it’s strengthened its balance sheet with a partial public offering of its midstream assets as Inergy Midstream LP (NYSE: NRGM), raising a bit over $250 million with which to buy back debt while retaining control and most cash flow. Inergy Midstream’s IPO price was a bit below expectations, though we’ve subsequently seen six executives of the new company make additional purchases.

The key now is if cost reductions combined with expected operating improvements at Inergy Midstream will be enough to offset weakness at the propane operation. We’ll find out on or about Feb. 1, when Inergy is expected to announce fiscal 201X first-quarter results.

Meanwhile, the partnership units are clearly priced for a sizeable distribution cut and therefore a torrid rally should management demonstrate it can maintain the payout. Inergy LP–and its 12 percent-plus yield–is a buy under 25.

As with all Big Yield Hunting recommendations, Inergy should only be held by investors who understand the risks, and at that within a diversified portfolio.

We also strongly advise against succumbing to the temptation to average down in this or any open position.

There’s always another high yielder to buy out there, and some of these do stumble.

We also advise Big Yield Hunters to sell half of your position in PetroBakken Energy Ltd (TSX: PBN, OTC: PBKEF), which has roughly doubled from our entry point a couple months back.

For more on Inergy, PetroBakken and other Open Positions, see the January issue of Big Yield Hunting.