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Natural gas processor and distributor, MarkWest Energy Partners LP (MWE - Analyst Report) raised its first-quarter 2013 cash distribution to 83 cents per unit ($3.32 per unit annualized), representing an increase of approximately 1.2% sequentially and 5.1% year over year.

MarkWest’s announcement is in sync with its goal of delivering disciplined growth to unitholders. The partnership boasts a consistent and improving financial policy with high distribution coverage. MarkWest’s new distribution is payable on May 15 to unitholders of record as on May 7, 2013.

MarkWest is a Colo.-based master limited partnership (MLP). The partnership gathers, processes and transports natural gas. It also engages in the transportation, fractionation and storage of natural gas liquids (NGLs) as well as the gathering and transportation of crude oil. The customers of MarkWest include major oil and gas companies, large and small independent energy companies and oil refineries. The partnership conducts its operations in four segments: Southwest, Northeast, Liberty and Utica.  

We like MarkWest’s high-quality and diverse portfolio of midstream assets, which generate stable and recurring revenues from long-term fee-based contracts. It is one of the largest processors of natural gas in the Northeast and the largest gatherer of natural gas in the prolific Carthage field in East Texas. Additionally, MarkWest has a number of other gas gathering and intrastate gas transmission assets in the Southwest, primarily in Texas and Okla.

However, like other MLPs, the actual amount of cash distributed to MarkWest unitholders may fluctuate and is directly exposed to the partnership’s future operating performance, which is susceptible to movement in margins and throughput volumes.

MarkWest currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.  

Three oil and gas production pipeline MLPs that are expected to outperform the broader U.S. equity markets in the next one to three months are Atlas Pipeline Partners LP (APL - Snapshot Report), Delek Logistics Partners LP (DKL - Snapshot Report) and Energy Transfer Partners LP (ETP - Analyst Report). All three stocks carry a Zacks Rank #2 (Buy). 

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