The board of directors of the pipeline operator
Plains All American Pipeline L.P.
) has approved a two-for-one unit split of the partnership's common
units. The unit split will enhance the accessibility of this solid
performer to a large group of potential investors.
A good many investors were interested in taking position in this
partnership, which has surpassed the Zacks earnings projection for
eight straight quarters, but were held back by the high trading
unit price. The current traded price of $ 87.12 at close of market
on August 16, 2012, reflects a jump of 50.9% year over year. This
unit split will allow investors to invest in this top pipeline
operator at a cheaper price.
The stock split will be effective on October 1, 2012 by
distribution of a common unit for each unit held by the unitholders
at the close of business on September 17, 2012. Considering that
the number of common units remains stable at 163,956,898, the count
as of August 15, 2012, the post stock split count would come to
327,913,796 common units.
Plains All American Pipeline presently has an attractive
valuation, potentially bringing in more investors. On a
price-to-equity (P/E) basis the partnership is presently trading at
a discount to its peers. It has a forward P/E of 17.5x, down 24.2%
from the peer group average of 23.1x. The price-to-book is at 2.1x,
a 12.5% discount to the peer group average of 2.4x. The
price-to-sales is at 0.38x, a 61.6% discount to the peer group
average of 0.99x.
We view Plains All American Pipeline as a partnership with
strong crude oil pipelines and storage assets portfolio in
prospective oil producing regions. The partnership rewards its
unitholders through regular cash distribution and intermittent
increase in the distribution rate. Besides, this stock split will
further increase the liquidity of its unitholders.
Plains All American Pipeline presently retains a Zacks #3 Rank
(Hold) and competes with
ONEOK Partners, L.P.
Enterprise Products Partners L.P.
) among others.
Based in Houston, Texas Plains All American Pipeline L.P. - a
master limited partnership - was founded in 1998. The partnership
is engaged in the transportation, storage, terminalling and
marketing of crude oil, refined products and liquefied petroleum
gas and other natural gas-related petroleum products in North
ENTERPRISE PROD (EPD): Free Stock Analysis
ONEOK PARTNERS (OKS): Free Stock Analysis
PLAINS ALL AMER (PAA): Free Stock Analysis
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