Global Partners: A High Dividend Stock with Big Earnings Growth

Big earnings growth and a high dividend are two variables that don't often go together when screening for the best stocks to buy, but in Global Partners' (GLP) case, these 2 features just coalesced in their 2009 Q2 earnings report. A screen for 30%-plus EPS growth this year and quarter-over-quarter, and a 9%-plus dividend turned up mostly energy stocks - oil & gas pipeline or drilling companies, and an assortment of other companies. GLP - a Master Limited Partnership (MLP) firm, just became part of this special group of high dividend paying stocks with high earnings growth. (Many web screeners may not include them yet, as they just reported yesterday).

Although their revenue fell significantly, GLP was able to post major increases in EBITDA, net income, distributable cash flow, net income/diluted unit, by achieving large margin increases, improving their efficiencies, and posting a 3% product volume increase. Here are the numbers:

Global Partners LP 2nd Quarter 2009 Highlights:

($1,000's, except Net Inc/Unit)	Q2 2009	Q2 2008	CHANGE
Revenue	$1,200,000.00	$2,300,000.00	-47.83%
Distillates - Net Product Margin	$13,500.00	$9,300.00	45.16%
Wholesale Gasoline- Net Product Margin	$12,100.00	$10,400.00	16.35%
Gross Profit	$27,800.00	$22,787.00	22.00%
EBITDA	$8,600.00	$6,800.00	26.47%
Distributable Cash Flow	$3,300.00	$2,200.00	50.00%
Net Income	$978.00	-$1,200.00	181.50%
Net Income/Diluted Ltd. Partner Unit	$0.07	-$0.10	170.00%
Ltd Partner Units outstanding (millions)	13.40	13.10	2.29%

Global Partners LP Jan-June 2009 Highlights:

($1,000's, except Net Inc/Unit)	JAN-JUNE 2009	JAN-JUNE 2008	CHANGE
Revenue	$2,800,000.00	$5,000,000.00	-44.00%
Distillates - Net Product Margin	$47,300.00	$32,400.00	45.99%
Wholesale Gasoline- Net Product Margin	$23,900.00	$19,000.00	25.79%
Gross Profit	$78,500.00	$58,300.00	34.65%
EBITDA	$36,000.00	$25,300.00	42.29%
Distributable Cash Flow	$25,300.00	$14,000.00	80.71%
Net Income	$19,800.00	$7,400.00	167.57%
Net Income/Diluted Ltd. Partner Unit	$1.46	$0.55	165.45%
Ltd Partner Units outstanding (millions)	13.30	13.10	1.53%

The company recently announced its second quarter dividend of $.4875/unit (share) for the second quarter, which equals $1.95/unit annually.

At today's opening price of $20.61, GLP's current dividend yield is 9.46%, a yield which is certainly superior to most dividend stocks. In fact, looking at oil stocks in general, this yield is consistently in the top tier, with the exception of the oil & gas drilling/exploration group.

GLP's 5-year dividend growth rate is over 44%, and it has the highest dividend in its peer group, and a forward dividend payout ratio of 67%.

Although GLP is more highly leveraged than many of its peers, its current ratio is also near the top stocks in this group. Its ROE is also near the top, with over 44% owned by insiders, the Slifka family.

Business Outlook:

At the mid-point of 2009, our financial performance and the strategic steps we have taken to grow the business position us for a strong year,” CEO Eric Slifka said. “In recent months, we have continued to optimize our terminal network by initiating organic expansion projects in several Northeast markets, including Philadelphia,Albany, Oyster Bay, NY and Linden, NJ. These projects comprise an additional 870,000 barrels of storage capacity – broadening the depth and breadth of our strategic asset base. In addition, our planned bolt-on acquisition in Newburghincreases our New York footprint and enables us to further build our business. Overall, we remain encouraged about Global’s growth prospects. (August 6, 2009 Business Wire press release)

With the forward P/E of around 7 on this "high growth", high dividend stock , it might pay you to add GLP to your best stocks watch list.

Disclosure: Author is long shares of GLP

Comments

[YoYoMama:]

Nice pick, but cash-per-share at 22 cents would have me concerned about the sustainability of the dividend....

Aug 08 07:48 AM

[dowjobber:]

And it looks to me that the train left the station when it was under $6
last October it is upabout 360%. Has Nick checked out the cyclicality of cash flow for this MLP. Also don't call the payout a dividend, this distribution is based on cash flow and these guys are Leveraged (with a capital L) and interest rates could change dramatically in the next six months. Why was it under 6 in October? Maybe folks were concerned about credit pre-TARP. Folks are desperate for yield and the smart people bought it when the banks got the liquidity injection which allowed them to keed their lines of credit open.

Aug 08 04:35 PM

[User 144301:]

All over the USA+ there are (MANY, MANY) Vacant Industrial, Shopping Centers & Office Buildings.

I like the President Obama, and his plan, to date! I am VERY disappointed with most of the Republicans. They seem mainly interested in themselves and not the national majority and not the USA!!!

Outside the USA+ we already have the government structures, Consulate Offices, in place, well established, to help bring businesses back to this USA. Industries can and should have governmental funding, moving expenses, lease subsidies, etc. to help establish them here, USA+.

I know this President, that makes me smile, has his plates full!
It is jobs that will help solve many problems that we saw, long before this President took office.

I have addressed the White House 3 times and I have yet to have any reply. I would like to take a paid position as a leader in the Commerce Dept. to help return our Nation into a respected desirable USA which we have lost, lost, lost!!!!
Sincerely, Burton Nashban
West USA Real Estate, Inc.
Real Estate & Business Sales & Leasing
Home---- 9341 N. 87th Way
Scottsdale, AZ, 85258
H) 480-922-9774
O) 480-948-5554
email [e-mail]

Aug 08 05:25 PM

[Saul Alinsky:]

Our current president is an idiot and imposter who have never run a lemonade stand, and his cabinet and advisors are a bunch of academic socialists. You do NOT want to work for these failures or your resume will stink with it forever. Be glad they are not responding to you.


On Aug 08 05:25 PM User 144301 wrote:

> All over the USA+ there are (MANY, MANY) Vacant Industrial, Shopping
> Centers & Office Buildings.
>
> I like the President Obama, and his plan, to date! I am VERY disappointed
> with most of the Republicans. They seem mainly interested in themselves
> and not the national majority and not the USA!!!
>
> Outside the USA+ we already have the government structures, Consulate
> Offices, in place, well established, to help bring businesses back
> to this USA. Industries can and should have governmental funding,
> moving expenses, lease subsidies, etc. to help establish them here,
> USA+.
>
> I know this President, that makes me smile, has his plates full!
>
> It is jobs that will help solve many problems that we saw, long before
> this President took office.
>
> I have addressed the White House 3 times and I have yet to have any
> reply. I would like to take a paid position as a leader in the Commerce
> Dept. to help return our Nation into a respected desirable USA which
> we have lost, lost, lost!!!!
> Sincerely, Burton Nashban
> West USA Real Estate, Inc.
> Real Estate & Business Sales & Leasing
> Home---- 9341 N. 87th Way
> Scottsdale, AZ, 85258
> H) 480-922-9774
> O) 480-948-5554
> email [e-mail]

Aug 09 01:12 PM