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Plains All American Pipeline LP (PAA - Analyst Report) extended its practice of sharing more benefits with its unitholders by increasing the cash distribution rate. The partnership has increased its quarterly cash distribution by 2.2% sequentially and 10% year over year to 57.50 cents per unit on all of its outstanding limited partner units. It will be paid on May 15, 2013, to unitholders of record as of May 3.

As a result of this revision, Plains All American Pipeline’s annualized cash distribution rate will be $2.30 per unit. The new annual cash distribution yield will be 4.09%, which is higher than the industry average of 2.61%.

Plains All American Pipeline has a long history of increasing distributions to boost their income. With the latest distribution, the partnership has hiked quarterly cash distribution to its limited partners in 34 out of the past 36 quarters and in 15 consecutive quarters. The last hike was in Jan 2013. Quarterly cash distribution increased 3.7% sequentially to 56.25 cents per unit.

The market reacted positively toward the cash-distribution-hike and the unit price increased 2.7% and closed at $56.23 as of Apr 8, 2013. The strong financial performance of Plains All American Pipeline increases investors’ expectation.

The partnership, in turn, boosts their confidence through distribution hikes at regular intervals. Plains All American Pipeline is consistently posting strong results backed by organic growth as well as contribution from its acquired assets.

Apart from Plains All American Pipeline, some other partnerships with exposure to natural gas have recently raised their quarterly cash distribution rates. ONEOK Partners L.P. (OKS - Analyst Report), PVR Partners L.P. and Sunoco Logistics Partners L.P. (SXL - Analyst Report) increased quarterly distribution by 3.6%, 1.9% and 5% sequentially to 71 cents, 55 cents, 54.50 cents per unit, respectively.

Houston-based Plains All American Pipeline owns assets strategically located in well-established oil producing regions, catering to the major U.S. refinery and distribution markets. The partnership currently has a Zacks Rank #3 (Hold).

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