Record Earnings, 18 Straight Hikes, 12%-15% Distribution Growth, Guidance Up Again, Insider Buying

Jul. 29, 2017 9:54 AM ETMPLX LP (MPLX)ARCX, ET, GPP, HEP, MMLP, MPC, PAA, PBF, SMLP47 Comments

Summary

  • Q2 '17 revenue, EBITDA and DCF all grew over 30% to record amounts.
  • Management has increased quarterly distributions 18 straight quarters - it goes ex-dividend this week.
  • It just increased 2017 guidance again for the second time this year.
  • Distribution will grow 12% to 15% in 2017 and double digits in 2018.
  • The CEO bought 9,000 shares in June.

If you're looking to get on the ascending side of a growth trajectory, maybe you should look closer at MPLX LP (NYSE:MPLX), a midstream energy MLP we've covered in previous articles.

We last covered MPLX on 5/4/17 - since then, it's up 9%. Although it trails the market year to date, it has caught a bid in the past month, rising 12.66%. Guggenheim started coverage on July 20th, giving it a Buy rating, with a target of $40.00.

The company's CEO, Gary Heminger, made a bullish move on June 12th, buying 9,000 shares at $33.26, for a total investment of $299K:

(Source: finviz)

MPLX has been on a roll, increasing its assets via drop-downs from its sponsor/general partner, Marathon Petroleum Corp. (NYSE:MPC). MPLX is a diversified, growth-oriented master limited partnership formed in 2012 to own, operate, develop, and acquire midstream energy infrastructure assets. In 2015, MPLX merged with MarkWest, whereby MarkWest became a wholly-owned subsidiary of MPLX.

Q2 '17 saw record amounts again, in revenue, net income, EBITDA, and DCF:

This asset growth trajectory has led to some rather impressive quarterly growth numbers over the past four quarters:

Which, in turn, has caused management to increase its 2017 EBITDA, DCF, and Net Income guidance for the 2nd straight quarter. In addition, management has reaffirmed its guidance for 12% to 15% distribution growth in 2017 and double-digit growth in 2018:

Unit count grew over 15%, as management issued units to help fund its acquisitions, but with 68% DCF growth, both distributions/unit and distribution coverage have grown in the past four quarters:

Distributions:

Management declared its 18th straight quarterly distribution hike, raising the payout to $.5625 vs. last quarter's $.54 payout. It currently yields 6.2% and goes ex-dividend this week, on 8/3/17. MPLX has a four-year annualized distribution growth rate of

This article was written by

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Disclosure: I am/we are long MPLX, GPP, PBFX, MMLP, ARCX, ENBL. 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.

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