Petroleum storage and transportation partnership
Magellan Midstream Partners L.P.
) increased its fourth quarter 2012 distribution by 3% to 50
cents per unit ($2.00 per unit annualized). This payout is 23%
higher on an annualized basis. The new distribution will be paid
on Feb 14, 2013 to shareholders of record as of Feb 6, 2013.
MAGELLAN MDSTRM (MMP): Free Stock Analysis
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Magellan Midstream's latest payout hike marks the 43rd
distribution increase since its initial public offering (IPO) in
The distribution hike reflects continued strong performance by
the partnership, backed by solid operating results, good
investments and a diligent execution of its strategic plan. We
believe that the partnership will be able to generate sufficient
cash flows for its shareholders in the coming years, which will
likely be backed by strong operating performances and good
management decisions. Prior to this revision, in October 2012,
the company increased its quarterly distribution by 3%.
We believe that the increase in distribution will boost
investors' confidence in the stock, thereby driving unit value.
Tulsa, Oklahoma-based Magellan Midstream owns and operates a
diversified portfolio of energy infrastructure assets. The
partnership conducts its operations in three segments, namely,
Petroleum Products Pipeline System, Petroleum Products Terminals
and Ammonia Pipeline System.
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 through long-term
Magellan Midstream currently carries a Zacks Rank #2 (Buy).
Besides Magellan Midstream,
Williams Companies Inc.
Williams Partners L.P.
Western Refining Inc.
) also increased their capital redeploying efforts recently
through payout increases.