Sunoco L.P. May Rebound

Sunoco Logistics Partners L.P. (SXL - Analyst Report) hit a 52-week low of $42 before stabilizing around the $42.30 mark on Wednesday morning, a day after the company announced that Hurricane Ike hardly affected its operations. With no hurricane on the horizon, the stock may soon be on a rebound.

Going forward, with a P/E of 9.97, Sunoco offers a dividend yield of 8.56%, which is at a premium to the pipeline industry’s average of 1.38%. In the second quarter, the partnership increased its quarterly distribution by 11.7% year-over-year to the annualized rate of $3.74 per unit. The company has beaten consensus estimates consistently over the last four quarters, with an average surprise of 18.85%.   

Taking note of the developments, analysts have raised the partnership’s EPS estimate by 50 cents from $3.88 to $4.38 over the last three months. However, with a Zacks Price Target of $45, the stock offers a limited upside potential of 2.51% for this year. So, according to Zacks analyst Sheraz A. Mian, the preferred names in the oil production/pipeline segments remain NuStar Energy L.P. (NS - Snapshot Report), TC Pipelines, L.P. (TCLP - Analyst Report) and Enterprise Products Partners L.P. (EPD - Analyst Report), which hit a new 52-week low of $23.46 on Monday and is trading at $24.57 today.