Our analysis is based on comparing Magellan Midstream Partners LP with the following peers – Plains All American Pipeline, L.P., Holly Energy Partners, L.P., NuStar Energy L.P., Phillips 66 Partners LP, MPLX LP, Enbridge Energy Management, L.L.C., Enbridge Energy Partners, L.P. Class A, Plains GP Holdings LP Class A, Delek Logistics Partners LP and Blueknight Energy Partners, L.P. (PAA-US, HEP-US, NS-US, PSXP-US, MPLX-US, EEQ-US, EEP-US, PAGP-US, DKL-US and BKEP-US).
Magellan Midstream Partners LP’s dividend yield is 5.16 percent and its dividend payout is 91.98 percent. This compares to a peer average dividend yield of 8.78 percent and a payout level of 96.64 percent. This relatively lagging dividend performance would normally spur the company to consider some dividend action going forward – but for the fact that the current dividend quality score of 17 out of a possible score of 100 looks weak.
Dividend Quality Overview
- Over the last twelve months (prior to June 30, 2017), MMP-US paid a low quality dividend, which represents a yield of 4.96% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were medium quality and 3 were low quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
Quadrant label definitions. Hover to know more
Over the last twelve months (prior to June 30, 2017), MMP-US paid a low quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 1.45x), investing cash flow (coverage of -1.02x), issuance cash flow (coverage of 0.49x) and twelve-month prior cash (coverage of 0.09x), for a total dividend coverage of 1.02x.
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||4.13||3.32||3.03||4.29||4.29||5.16|
|Dividend Payout (%)||92.9||81.93||67.89||81.2||92.19||91.98|
A complete list of metrics and analysis is available on the company page.
Magellan Midstream Partners LP engages in the transportation, storage and distribution of petroleum products, such as gasoline, diesel fuel and crude oil. It operates through three segments: Refined Products, Crude Pipeline and Marine Storage. The Refined Products segment consists of common carrier refined products pipeline system, independent terminals, and its ammonia pipeline system. The Crude Oil segment comprises of crude oil pipelines and storage facilities which are used for leased storage. The Marine Storage segment includes marine terminals located along coastal waterways. The company was founded in August 2000 and is headquartered in Tulsa, OK.
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