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Pipeline operator Magellan Midstream Partners L.P. (MMP - Analyst Report) raised its second quarter 2014 cash distribution by 4% sequentially and 20% year over year to 64 cents per unit ($2.56 per unit annualized).

The cash distribution is up 388% since its initial public offering (IPO) in the beginning of 2001. Magellan Midstream’s new distribution is payable on Aug 14 to unitholders of record as on Aug 4, 2014.

Tulsa, OK-based Magellan Midstream is a master limited partnership (“MLP”) that owns and operates a diversified portfolio of energy infrastructure assets. The partnership primarily transports, stores and distributes refined petroleum products. The oil distributor conducts its operations in three segments: Refined Products, Crude Oil and Marine Storage.

The proposed hike in distribution at Magellan Midstream is in sync with its goal of raising the annual distribution by 20% in 2014 and 15% in 2015. The partnership has a proven history of distribution growth with 49 quarterly increases since inception.

Magellan Midstream, which is slated to report its second quarter results on Aug 5, has bolstered its cash flows recently on the back of benefits from acquired assets and growth projects, escalating demand for petroleum products and improved tariff rates.

Magellan Midstream currently carries a Zacks Rank #1 (Strong Buy), implying that it is expected to significantly outperform the broader U.S. equity market over the next one to three months.

Apart from Magellan Midstream, one can look at Valero Energy Partners L.P. (VLP - Snapshot Report), Atlas Pipeline Partners L.P. (APL - Snapshot Report) and NuStar Energy L.P. (NS - Analyst Report) as good buying opportunities. While Valero Energy Partners holds a Zacks Rank #1, Atlas Pipeline Partners and NuStar Energy both carry a Zacks Rank #2 (Buy).

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