On Aug 10, 2013, Zacks Investment Research upgraded pipeline
Magellan Midstream Partners LP
) to a Zacks Rank #1 (Strong Buy).
CABOT OIL & GAS (COG): Free Stock Analysis
DRIL-QUIP INC (DRQ): Free Stock Analysis
MAGELLAN MDSTRM (MMP): Free Stock Analysis
PEMBINA PIPELN (PBA): Free Stock Analysis
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Why the Upgrade?
Magellan Midstream witnessed rising earnings estimates on the
back of excellent second-quarter 2013 earnings. In fact, this
Tulsa, Okla.-based oil distributor delivered positive earnings
surprises in three of the last four quarters with an average beat
of 3.11%. The long-term expected earnings growth rate for the
partnership also stands at an impressive 11.9%.
On Aug 1, Magellan Midstream reported better-than-expected
second-quarter earnings, on the back of strong activities from
transportation and terminal operations. The partnership posted
second-quarter adjusted earnings per unit (EPU) of 65 cents,
easily beating the Zacks Consensus Estimate of 53 cents. Magellan
Midstream's performance also improved considerably from the
year-ago adjusted profit of 51 cents per unit.
Recently, Magellan Midstream raised its second-quarter 2013 cash
distribution by 5% sequentially and 13% year over year to 53.25
cents per unit ($2.13 per unit annualized). Moreover, management
hiked its expected distributable cash flows for full-year 2013 by
$50.0 million to $630.0 million. It also announced increased
annual distribution growth targets of 16% and 15% for 2013 and
Additionally, Magellan Midstream owns an attractive portfolio of
energy infrastructure assets that generates stable and recurring
fee and tariff-based revenues. This includes the longest U.S.
refined petroleum products pipeline system, access to more than
40% of the refining capacity in the continental U.S., along with
imports, and petroleum terminals with more than 80 million
Based on these bullish factors, an upward estimate revision has
been obvious in recent times. The Zacks Consensus Estimate for
2013 has increased by 10.7% to $2.49 per unit, as all 9 estimates
were revised higher over the last 30 days.
Other Stocks to Consider
Other energy firms that are expected to offer value in the next
one to three months are
Cabot Oil & Gas Corporation
Pembina Pipeline Corporation
). All three stocks carry a Zacks Rank #1 (Strong