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Sunoco Logistics, LP (SXL)

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Buoyed by a robust operating performance and favorable growth prospects, we are upgrading Sunoco Logistics Partners, LP (SXL) to Outperform from Neutral. Recent results for Sunoco Logistics have been driven by strength in its crude pipeline system and terminals facilities.

Importantly, the partnership has grown its cash distribution for twenty-five consecutive quarters. With its stable fee-based revenue, geographically-diverse assets and strong business fundamentals, Sunoco Logistics offers investors an opportunity to capture income growth through steadily-rising cash distributions and capital appreciation.

Therefore, we are confident of the partnership's total return potential. Its current quarterly distribution of $1.215 per unit ($4.86 per unit annualized) is up from $0.45 per unit ($1.80 per unit annualized) at the time of its 2002 IPO.

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