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Pipeline operator Magellan Midstream Partners, L.P. (MMP - Analyst Report) raised its first quarter 2013 cash distribution by 2% sequentially and 21% year over year to 50.75 cents per unit ($2.03 per unit annualized).

The cash distribution is up 287% since its initial public offering (IPO) in the beginning of 2001. Magellan Midstream’s new distribution is payable on May 15 to unitholders of record as on May 8, 2013.

Tulsa, Oklahoma-based Magellan Midstream is a master limited partnership (“MLP”) that owns and operates a diversified portfolio of energy infrastructure assets. The partnership primarily transports, stores and distributes refined petroleum products and, to a lesser extent, ammonia.

The oil distributor conducts its operations in three segments: Petroleum Products Pipeline System, Petroleum Products Terminals and Ammonia Pipeline System.

The proposed hike in distribution at Magellan Midstream is in sync with its goal of raising the annual distribution by 10% in 2013. The partnership has a proven history of distribution growth with 44 quarterly increases since inception.

Magellan Midstream, which is slated to report its first-quarter results on May 2, has bolstered its cash flows recently on the back of benefits from acquired assets and growth projects, escalating demand for petroleum products and improved tariff rates.

Magellan Midstream currently carries a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.

Apart from Magellan Midstream, one can look at Atlas Pipeline Partners L.P. (APL - Snapshot Report), Delek Logistics Partners L.P. (DKL - Snapshot Report) and Energy Transfer Partners L.P. (ETP - Analyst Report) as good buying opportunities. These domestic oil and natural gas explorers – also sporting a Zacks Rank #2 (Buy) – have solid secular growth stories with potential to rise from current levels.

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