On Aug 31, Zacks Investment Research upgraded
Susser Petroleum Partners L.P.
) to a Zacks Rank #1 (Strong Buy).
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SUSSER PETRLEUM (SUSP): Free Stock Analysis
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Why the Upgrade?
This partnership focused on the distribution of motor fuel
reported a positive earnings surprise of 2.33% in the second
quarter. The long-term expected earnings growth rate for this
stock is 8.0%.
Susser Petroleum Partners' earnings per unit in the second
quarter were 44 cents, a penny higher than the Zacks Consensus
Second quarter revenues were $1.12 billion, a 2.8% increase from
$1.09 billion reported in the comparable year-ago quarter. The
5.4% year-over-year increase in gallons sold primarily benefited
the results, offset marginally by a decline in the selling price
The partnership continues to expand its business through purchase
and leaseback transactions. Since its initial public offering in
Sep 2012, the partnership has completed the purchase and
leaseback of 22 Stripes stores for a cumulative cost of $89.7
million. These 22 stores are expected to generate annual rental
income of $7.2 million.
Consistently strong performance also enables Susser Petroleum
Partners to reward its unitholders through regular distribution
payments. The partnership's current quarterly distribution rate
of 45.28 cents reflects a 3.5% sequential increase from 43.75
cents distributed in the first quarter.
The present valuation also makes the partnership attractive. The
forward P/E multiple of 17.44% is at a discount of 14.5% to the
peer group average of 20.4%. The ROE of the partnership is 36.2%,
which is higher than the peer group average of 25.3%.
The Zacks Consensus Estimate for 2013 has risen 4.1% in the last
30 days to $1.77 per unit, reflecting whopping year-over-year
growth of 321.8%. For 2014, the Zacks Consensus Estimate
increased 7% in the past 30 days to $1.98 per share, reflecting
year-over-year growth of 12.02%.
Besides Susser Petroleum Partners, other operators in the sector
having a favorable Zacks Rank are
Golar LNG Partners L.P.
Western Gas Equity Partners, L.P.
Delek Logistics Partners, L.P.
). All of them presently carry a Zacks Rank #2 (Buy).