On May 8, 2013, the units of
Plains All American Pipeline, L.P.
) climbed to its 52-week high of $59.17 primarily driven by
robust performance in first-quarter 2013. The partnership's top
and bottom line surpassed both the Zacks Consensus Estimates as
well as the year-ago results. Improvement in performance was
mainly due to strong contribution from the fee-based
Transportation and Facilities segments, and proper implementation
in the margin-based Supply and Logistics segment.
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Recently, Plains All American Pipeline completed acquisition of
natural gas liquids (NGL) assets from a subsidiary of
). The partnership has already experienced positive impact from
the acquisition. Transportation and Facilities segments'
outperformance has primarily fuelled from the addition of these
NGL assets. We believe this acquisition will boost Plains All
American Pipeline's midstream business in the future through
addition of pipelines, storage capacity, fractionation plants and
Plains All American Pipeline intends to invest additional $300
million in 2013 for several projects, including Mississippian
Lime pipeline, Rainbow 2 pipeline and Gardendale Gathering System
projects. This additional investment will drive the capital
expenditure to $1.4 billion.
Apart from investment in growth projects, Plains All American
Pipeline's stable financial position also allows it to improve
unitholders' value through regular cash distribution payments.
Recently, the board of directors of Plains All American Pipeline
increased its quarterly cash distribution by 2.2% sequentially
and 10% year over year to 57.50 cents per unit on all of its
outstanding limited partner units. The partnership's practice of
raising cash distributions from time to time will benefit the
stock as it attracts investor attention.
Plains All American Pipeline's full-year 2013 adjusted earnings
before interest, tax, depreciation and amortization (EBITDA)
guidance will increase by $135 million primarily due to the
benefits of solid first-quarter results and a marginal
improvement for the second-quarter outlook.
Plains All American Pipeline currently has a Zacks Rank #3
(Hold). Apart from Plains All American Pipeline, other stocks in
the industry that are worth considering include
Kinder Morgan Management LLC
Midstream Partners LP
). Both the organizations hold a Zacks Rank #2 (Buy).