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Diversified midstream energy operator Genesis Energy L.P. (GEL - Snapshot Report) raised its third quarter 2012 cash distribution to 47.25 cents per unit ($1.89 per unit annualized), representing an increase of approximately 2.7% sequentially and 10.5% year over year. Importantly, the latest payout marks the 29th consecutive quarterly distribution hike by the pipeline operator, of which 24 increases have been 10% or more year over year.

Genesis Energy’s announced distribution boost is in sync with its goal of delivering disciplined growth to unitholders. The partnership boasts of a consistent and improving financial policy with high distribution coverage. Genesis Energy’s new distribution is payable on November 14 to unitholders of record as on November 1, 2012.

Houston, Texas-based Genesis Energy is a master limited partnership that operates crude oil pipelines and is an independent gatherer and marketer of crude oil in North America, with operations concentrated in Texas, Louisiana, Alabama, Florida, Mississippi and New Mexico. Genesis Energy engages in three business segments: Pipeline Transportation, Refinery Services, and Supply and Logistics.

Genesis Energy – which acquired interests in Gulf of Mexico oil pipelines from Marathon Oil Corp. (MRO - Analyst Report) in January – currently retains a Zacks #2 Rank, which translates into a short-term Buy rating.

With a juicy distribution yield of 5.6%, a business model focused on operational efficiencies and attractive acquisitions/growth projects, Genesis Energy provides investors with a steady, predictable income stream.

Valuation also looks reasonable for Genesis Energy. The stock is going for about 29.7 times forward estimates, same as the peer group average. Additionally, its price-to-sales (P/S) ratio of 0.8 is essentially in-line with what similar firms offer.

On top of this, earnings growth is expected to be strong in 2012 and 2013, based on the solid fixed margin businesses and limited commodity price exposure.

The 2012 Zacks Consensus Estimate is $1.13, representing 17% earnings per unit growth over 2011. Next year’s average forecast is $1.34, corresponding with 18% growth.

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