Global Partners: Huge Yield, Solid Growth

| About: Global Partners (GLP)

Global Partners L.P. (NYSE:GLP) delivered solid results when it reported earnings this morning. GLP is a unique limited partnership that provides a great yield as well as solid, steady growth opportunities. It is the type of energy partnership that makes up a good portion of my income portfolio. Yield investors should take a hard look at the shares for possible inclusion on the income side of their investments.

Here are key highlights from GLP's earnings report:

  • Earnings per share came in at 51 cents, 6 cents above consensus estimates.
  • Revenue came in at $5.6 billion, a whopping $1.3 billion above expectations.
  • EBITDA doubled Y/Y to $38.8 million.
  • Distributable cash flow was $26.6 million, up 276% Y/Y.

Global Partners LP distributes gasoline, distillates, residual oil, and renewable fuels to wholesalers, retailers, and commercial customers in the New England states and New York. It has a portfolio of approximately 1,000 owned, leased, and/or supplied gasoline stations primarily in the Northeast. The company also owns, leases, or maintains 25 refined petroleum product bulk terminals with the capacity of approximately 50,000 barrels.

Here are four additional reasons why GLP is a good income pickup at $35 a share:

  1. This is the sixth straight quarter the company easily beat on revenue expectations. In addition, consensus earnings estimates for FY 2013 and FY 2014 over the last two months. I would look for more upward revisions in the coming week.
  2. GLP yields 6.7%. The company consistently raises payouts a few pennies a share every year. Distribution has risen ~40% over the past seven years.
  3. The company has gone from negative cash flow in FY 2010 and FY 2011 to over $230 million in operating cash flow in FY 2012. The stock sells for under five times operating cash flow currently.
  4. Very unusual for a high yielder, the stock sells for a five-year projected PEG of less than 1 (.53), and it is also priced at ~11 times 2014's projected earnings.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in GLP over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.