MPLX: Expect 12% To 18%+ Of Your Capital Returned During 2022

Feb. 07, 2022 10:12 AM ETMPLX LP (MPLX)53 Comments
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DT Analysis
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Summary

  • After navigating the severe downturn of 2020, MPLX appears focused on returning as much capital as possible to their unitholders.
  • Their operating cash flow and free cash flow reached new records during 2021 and should remain strong during 2022 with a very high estimated near 12% free cash flow yield.
  • Since their leverage ratio is below their point targeted level, they will likely at least return all of this free cash flow through a combination of distributions and share buybacks.
  • If they realign their leverage back to their targeted level, this could see them borrowing to fund another bonus of high 6%+ unitholder return.
  • Since their unitholders appear poised to see between near 12% and 18%+ of their capital returned during 2022, I believe that maintaining my strong buy rating is appropriate.

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Introduction

After surprising their unitholders with a large special distribution towards the end of 2021, MPLX (NYSE:MPLX) was poised to continue rewarding their unitholders with even more distribution growth, as my previous article

MPLX Ratings

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MPLX Cash Flows

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MPLX Capital Expenditure Guidance

MPLX Fourth Quarter Of 2021 Results Presentation

MPLX Capital Structure

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MPLX Leverage Ratios

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MPLX Liquidity Ratios

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This article was written by

DT Analysis profile picture
10.65K Followers
My analysis primarily focuses on income investments with a preference for those sporting high and very high yields.  This space often contains value traps, although it also contains very desirable opportunities that have the potential to generate significant alpha for investors.  I endeavor to help investors make their own investment selections by providing my insights into financial information released by companies in the context of the current economic outlook.  Whilst I offer ratings via this site, these should not be taken as financial advice nor to proceed with a particular investment.  Apart from my extensive personal investment experience that spans over a decade, I have also obtained a Bachelor degree with Honours majoring in Finance, minoring in Accounting.

Disclosure: I/we have a beneficial long position in the shares of MPLX either through stock ownership, options, or other derivatives. 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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