Plains All American Pipeline LP
) continues to share more benefits with its unitholders through
consistent increases in the cash distribution rate. The
partnership announced a new quarterly cash distribution rate of
56.25 cents per unit on all of its outstanding limited partner
The partnership has a long history of increasing distributions
to unitholders. With the latest distribution, Plains has hiked
the quarterly distribution to limited partners in 33 out of the
past 35 quarters and consecutively in each of the past 14
The new distribution reflects 3.7% growth over the quarterly
distribution of 54.25 cents per unit paid in November 2012 and
9.8% growth from the quarterly distribution of 51.25 cents per
unit paid in February 2012. It will be paid on February 14, 2013,
to unit holders of record as of February 1, 2013.
The partnership is consistently posting strong results backed
by organic growth as well as contribution from its acquired
assets. Strong financial results enable Plains to increase
distribution rates consistently.
Plains has provided earnings surprises consistently in the
preceding nine quarters and is optimistic about maintaining its
growth momentum in the forthcoming quarters. The partnership now
targets cash distribution rate of 9% to 10%, up from the prior
expectation of 7% to 8%, for 2013.
Plains' cash distribution depends primarily on cash flow that
includes cash flow from financial reserves and working capital
borrowings. The cash distribution does not solely depend on
profitability, which can be affected by non-cash items. Hence,
the partnership can sustain cash distribution even when it is
Enterprise Products Partners LP
), a Plains All American peer, also increased its quarterly cash
distribution rate in October 2012. The increased quarterly
distribution of 65 cents per unit, paid in November 2012,
represented growth of 2.4% over the quarterly distribution of
63.50 cents per unit paid in August 2012 and an increase of 6.1%
from the quarterly distribution of 61.25 cents per unit paid in
Plains All American Pipeline currently retains a Zacks #1
Rank, (Strong Buy). Another pipeline operator we like --
Sunoco Logistics Partners LP
) -- currently has a Zacks #2 Rank ( Buy).
Houston, Texas based Plains All American 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. The partnership has 3,800
employees and is also involved in the development and operation
of natural gas storage facilities.
ENTERPRISE PROD (EPD): Free Stock Analysis
PLAINS ALL AMER (PAA): Free Stock Analysis
SUNOCO LOGISTIC (SXL): Free Stock Analysis
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