Pipeline operator Magellan Midstream Partners LPMMP recently received an approval from its board of directors to hike cash distribution for fourth-quarter 2016.
In details, the partnership's distribution for Oct-Dec 2016 was approved at 85.50 cents per unit, up 9% from 78.50 cents in the year-ago quarter. The new cash distribution, which is anticipated to be paid on Feb 14, to the unitholders on record as of Feb 3, also marks a sequential hike of 2% from 83.75 cents. Most importantly, the recent increase is 59th distribution hike fafter the partnership's initial public offering (IPO) in 2001.
The partnership's annual distribution during 2016 was $3.315 per unit, up 10% from $3.005 per unit during 2015.
Tulsa, OK-based Magellan Midstream is a master limited partnership that owns and operates a diversified portfolio of energy infrastructure assets. The partnership primarily transports, stores, and distributes refined petroleum products and, to a lesser extent, ammonia.
Magellan owns an attractive portfolio of energy infrastructure assets that generate stable and recurring fee- and tariff-based revenues. These comprise the longest U.S. refined petroleum products pipeline system, access to almost 50% of refining capacity in the continental U.S. along with imports, and 85 petroleum terminals with more than 90 million barrels of storage.
Other positives include its investment grade rating and strong track record for distribution growth. We note that Magellan Midstream's fee-based transportation and storage assets make it less susceptible to commodity price weakness.
The partnership carries a Zacks Rank #2 (Buy), which implies that the company will outperform the broader U.S. equity market over the next one to three months.
Year to date, the Zacks categorized Oil/Gas Production Pipeline-MLP industry has registered an impressive growth of 6.80%. However, the Magellan stock has underperformed the industry by registering growth of only 5.32%.
Other well-ranked players from the broader energy sector are Braskem S.A. (BAK) , McDermott International, Inc. MDR and Suncor Energy Inc. SU . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
In the last quarter, McDermott posted a positive earnings surprise of 250.00%.
In the last quarter, Suncor posted a positive earnings surprise of 300.00%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today's most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>