Three Portfolio holdings reported quarterly earnings this week. The trio generated enough cash flow to cover their distributions comfortably, suggesting that these master limited partnerships (MLP) have the scope to raise their payouts if management sees fit.

The recent rally in the stock market has propelled the unit prices of many of our picks beyond our buy targets. However, Energy Transfer Partners LP (NYSE: ETP), Genesis Energy LP (NYSE: GEL) and Regency Energy Partners LP (NYSE: RGP) still trade at reasonable valuations. Here’s a brief rundown on how these MLP’s fared during the fourth quarter and an update on what’s ahead for them in 2012.

Energy Transfer Partners LP (NYSE: ETP)

In the fourth quarter of 2011, Energy Transfer Partners LP generated distributable cash flow (DCF) of $310.4 million, or $1.38 per unit–enough to cover the quarterly payout by a solid 1.55-to-1 margin. Though not a generally accepted accounting principle, DCF is the best measure of an MLP’s profits because the metric accounts for the tax advantages associated with being a pass-through entity.

The partnership’s full-year results were equally impressive: In 2011 the firm grew its DCF by 10.4 percent, to $1.14 per unit, and covered its distribution by a ratio of 1.42 to 1.

Energy Transfer Partners’ fourth-quarter revenue surged 25.1 percent from year-ago levels, bolstered by the addition of assets that handle natural gas liquids (NGL). Cash flow from the firm’s interstate pipelines more than doubled to 22.4 percent of the quarterly total. Meanwhile, the firm’s midstream operations yielded 17.1 percent more cash flow in the fourth quarter than in the final three months of 2010. NGL transportation and services also contributed $33 million in cash flow.

Overall, the firm increased its fourth-quarter cash flow by 16.5 percent from a year ago, despite a 24.5 percent in profits from its propane distribution segment.

Going forward, Energy Transfer Partners will receive a boost from the sale of its propane retailing business to AmeriGas Partners LP (NYSE: APU). The deal closed on Jan. 12, 2012, netting Energy Transfer Partners $1.46 billion in cash and 29.6 million units of AmeriGas Partners.

Units of Energy Transfer Partners tumbled after the firm’s general partner, Energy Transfer Equity (NYSE: ETE), announced plans to acquire pipeline owner Southern Union (NYSE: SUG). A settlement with Missouri regulators should allow the deal to close within a month, at which time Energy Transfer Partners will move ahead with a proposed $2 billion acquisition of a major Florida pipeline system.

With the cash from the sale of its propane business and a recent equity offering, the MLP will have no problem funding this acquisition. This transaction would serve as an upside catalyst for the stock and the distribution. We will reevaluate our buy target once the deal closes. Buy Energy Transfer Partners LP up to 55.

Genesis Energy LP (NYSE: GEL)

Conservative Portfolio holding Genesis Energy LP grew its fourth-quarter cash available before reserves by 28 percent from year-ago levels and covered its distribution by a 1.17-to-1 margin. On the year, the MLP paid out 91.9 percent of its cash flow.

Management expects Genesis Energy to grow its distribution by at least 10 percent in 2012. To date, the firm has increased its payout in 26 consecutive quarters.

The secret to Genesis Energy’s success is twofold. Not only do the MLP’s assets generate predictable levels of cash flow that give management the confidence to set its distribution policy in advance, but the firm also continues to make acquisitions and invest in organic growth projects. A market capitalization of just $2.15 billion also means that smaller deals have a much bigger impact on Genesis Energy’s bottom line. Buy Genesis Energy LP up to 30.

Regency Energy Partners LP (NYSE: RGP)

Regency Energy Partners LP grew its fourth-quarter cash flow by 29 percent and its full year cash from by 13 percent, largely because of its 30 percent stake in Lone Star, a joint venture (JV) with Energy Transfer Partners that will provide NGL storage, fractionation and transportation services to producers in the Eagle Ford Shale and the Permian Basin.

The JV partners also announced plans to construct a second NGL fractionation facility in Mont Belvieu, Texas. According to management, the facility is already supported by “multiple long-term contracts.”

The first fractionator should come onstream in the first quarter of 2013; the second facility is slated for completion approximately a year later. These projects will cost $350 million and will be immediately accretive to both Regency Energy Partners and Energy Transfer Partners.

Like Energy Transfer Partners, Regency Energy Partners also stands to benefit from potential drop-down transactions after Energy Transfer Equity closes its acquisition of Southern Union.

The MLP recently boosted its quarterly distribution to 46 cents per share and has plenty of scope to grow this payout in coming years. Buy Regency Energy Partners LP up to 29.

What’s Ahead

Here are the confirmed and expected reporting dates for Portfolio holdings that have yet to release quarterly results. We’ll share our quick take on quarterly earnings in brief Flash Alerts, followed by an in-depth review in the February issue of MLP Profits.

DCP Midstream Partners LP (NYSE: DPM)–Feb. 24 (estimated)
Legacy Reserves LP (NSDQ: LGCY)–Feb. 21 (confirmed)
Linn Energy LLC (NSDQ: LINE)–Feb. 23 (confirmed)
Penn Virginia Resource Partners LP (NYSE: PVR)–Feb. 20 (confirmed)
Targa Resources Partners LP (NYSE: NGLS)–Feb. 23 (confirmed)
Teekay LNG Partners LP (NYSE: TGP)–Feb. 24 (estimated)
Vanguard Natural Resources LLC (NYSE: VNR)–March 1 (confirmed)

The following Portfolio holdings have reported their fourth-quarter and full-year results. Here’s where to find information and analysis. Note that Inergy Midstream’s results are for its fiscal first quarter ended Dec. 31, 2011.

Energy Transfer Partners LP (NYSE: ETP)–Feb. 16 Flash Alert
Enterprise Products Partners LP (NYSE: EPD)–Feb. 8 Flash Alert
Genesis Energy LP (NYSE: GEL)–Feb. 16 Flash Alert
Inergy Midstream LP (NYSE: NRGM)–Kicking the Tires
Kinder Morgan Energy Partners LP (NYSE: KMP)–Crunching the Numbers
Magellan Midstream Partners LP (NYSE: MMP)–Feb. 8 Flash Alert
Navios Maritime Partners LP (NYSE: NMM)–Crunching the Numbers
Regency Energy Partners LP (NYSE: RGP)–Feb. 16 Flash Alert
Spectra Energy Partners LP (NYSE: SEP)–Feb. 8 Flash Alert
Sunoco Logistics Partners LP (NYSE: SXL)–Crunching the Numbers