The 10.8% Distribution Yield Of Sunoco LP Is Not As Risky As You May Think

|
About: Sunoco LP (SUN)
by: Aristofanis Papadatos
This article is exclusive for subscribers.
Aristofanis Papadatos
Oil & gas, portfolio strategy, value, bonds
Summary

SUN is offering an exceptional 10.8% distribution yield.

While such high yields usually signal the risk of a distribution cut, I have repeatedly stated that the distribution of SUN is safe in the absence of a deep recession.

Thanks to its fee-based model, SUN enjoys reliable and predictable cash flows.

Sunoco LP (SUN) is offering a 10.8% distribution yield, which is undeniably attractive, particularly given the suppressed interest rates prevailing right now. However, when a stock offers such an abnormally high yield,