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The board of directors of the pipeline operator Plains All American Pipeline L.P. (PAA - Analyst Report) has approved a two-for-one unit split of the partnership’s common units. The unit split will enhance the accessibility of this solid performer to a large group of potential investors.

A good many investors were interested in taking position in this partnership, which has surpassed the Zacks earnings projection for eight straight quarters, but were held back by the high trading unit price. The current traded price of $ 87.12 at close of market on August 16, 2012, reflects a jump of 50.9% year over year. This unit split will allow investors to invest in this top pipeline operator at a cheaper price.

The stock split will be effective on October 1, 2012 by distribution of a common unit for each unit held by the unitholders at the close of business on September 17, 2012. Considering that the number of common units remains stable at 163,956,898, the count as of August 15, 2012, the post stock split count would come to 327,913,796 common units.

Plains All American Pipeline presently has an attractive valuation, potentially bringing in more investors. On a price-to-equity (P/E) basis the partnership is presently trading at a discount to its peers. It has a forward P/E of 17.5x, down 24.2% from the peer group average of 23.1x. The price-to-book is at 2.1x, a 12.5% discount to the peer group average of 2.4x. The price-to-sales is at 0.38x, a 61.6% discount to the peer group average of 0.99x.

We view Plains All American Pipeline as a partnership with strong crude oil pipelines and storage assets portfolio in prospective oil producing regions. The partnership rewards its unitholders through regular cash distribution and intermittent increase in the distribution rate. Besides, this stock split will further increase the liquidity of its unitholders.

Plains All American Pipeline presently retains a Zacks #3 Rank (Hold) and competes with ONEOK Partners, L.P. (OKS - Analyst Report) and Enterprise Products Partners L.P. (EPD - Analyst Report) among others.

Based in Houston, Texas Plains All American Pipeline L.P. – a master limited partnership – was founded in 1998. The partnership is engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas-related petroleum products in North America.

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