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Petroleum storage and transportation firm Magellan Midstream Partners L.P. (MMP - Analyst Report) – a master limited partnership – completed the split of its limited partner units in the ratio 2:1. The partnership’s board of directors had given consent for the stock split in late August. Magellan Midstream will start trading on post-split basis from October 16.

For the split, stockholders with every single Magellan Midstream unit, as of the close of business on September 28, received one additional limited partner unit. Currently, the partnership’s share outstanding stands at approximately 226.2 million.

With the split, Magellan Midstream’s annual cash distribution is $1.885 per unit or 47.125 cents per unit on a quarterly basis.

This is Magellan Midstream’s second stock split, after the first one taking place in 2005. The stock split highlights the partnership’s efforts to see better liquidity, while raising the demand for the shares and making it accessible to a larger shareholder base.

Tulsa, Oklahoma-based Magellan Midstream owns and operates a diversified portfolio of energy infrastructure assets. The partnership conducts its operations in three segments: Petroleum Products Pipeline System, Petroleum Products Terminals and Ammonia Pipeline System.

Magellan Midstream will release its third-quarter 2012 results on November 5, Monday, before the opening bell. The Zacks Consensus Estimate for earnings in the third quarter is 44 cents per share, on revenue of $468 million.

Magellan Midstream, which recently announced plans to set up a 400-mile long oil transport pipeline joint venture with Los Angeles-based energy firm Occidental Petroleum Corporation (OXY - Analyst Report) – currently, retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. We also maintain our long-term Outperform recommendation on the stock.

We like Magellan Midstream’s low risk, stable business model and a proven track record of distribution growth. The partnership’s high-quality and diversified midstream assets are also projected to generate stable and recurring revenues by way of long-term fee-based contracts.

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