MarkWest Energy Partners L.P.
) - a master limited partnership (MLP) - increased its quarterly
common stock distribution by 1.2% to 82 cents per unit ($3.28 per
unit annualized). This payout is 7.9% higher on an annualized
basis. The new distribution will be paid on Feb 14, 2013, to
shareholders of record as of Feb 6, 2013.
MARKWEST EGY PT (MWE): Free Stock Analysis
WILLIAMS COS (WMB): Free Stock Analysis
WESTERN REFING (WNR): Free Stock Analysis
WILLIAMS PTNRS (WPZ): Free Stock Analysis
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The strength of MarkWest's business model reflects the
partnership's commitment toward returning value to shareholders
with its strong cash generation capabilities. Prior to this
revision, the company had increased its quarterly distribution by
1.3% in Oct 2012.
During the third quarter of 2012, MarkWest generated
distributable cash flow (DCF) - an indicator of cash paid for
distribution to unitholders - of $104.3 million, up from $85.3
million in the prior-year quarter, providing 1.09x distribution
We believe that the increase in distribution will boost
investors' confidence in the stock, thereby driving unit value.
Denver, Colorado-based MarkWest Energy Partners LP is engaged in
the gathering, processing and transmission of natural gas,
transportation, fractionation and storage of natural gas liquids
(NGLs), and the gathering and transportation of crude oil.
However, gathering and processing MLPs, like MarkWest, are more
sensitive to commodity prices compared with other MLP subgroups.
As a result, collapsing energy prices have adversely affected
their cash flow stability.
Additionally, as is the case with other MLPs, the actual amount
of cash distributed to MarkWest unitholders may fluctuate and are
directly exposed to the partnership's future operating
performance, which is susceptible to movements in margins and
throughput volumes. Realized margins and/or volumes could differ
significantly from our estimates, thereby affecting MarkWest's
MarkWest Energy currently carries a Zacks Rank #5 (Strong Sell).
Besides MarkWest Energy,
Williams Companies Inc.
Williams Partners L.P.
) with Zacks Rank #3 (Hold) as well as
Western Refining Inc.
) with Zacks Rank #2 (Buy) also increased their capital
redeploying efforts recently through payout increases.