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Sunoco: Distributions Still Stuck, Despite Pain At The Pump

Apr. 01, 2022 1:06 AM ETSunoco LP (SUN)8 Comments
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  • After Sunoco impressively sustained their distributions throughout the turmoil of 2020, they were nevertheless looking safe but stuck in place as the end of 2021 approached.
  • Despite oil and thus fuel prices recently surging to heights not seen for almost a decade, it does not help their fuel-related partnership.
  • They produce steady cash flow performance thanks to the inverse correlation between their margins and volumes, thereby giving stability at the expense of less potential upside.
  • Elsewhere, they saw good results during 2021 and their guidance for 2022 points towards modest growth.
  • Despite being positive, their distributions still appear stuck with minimal scope to fund higher payments and thus as a result, I believe that maintaining my hold rating is appropriate.

Sunoco Station, Royal Oak

RiverNorthPhotography/iStock Unreleased via Getty Images


After Sunoco (NYSE:SUN) impressively sustained their distributions throughout the turmoil of 2020 and the bumpy start to 2021, their high 8.09% yield was looking safe but stuck when looking ahead, as my

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I am no longer active, as I am taking a hiatus from finance to pursue business ventures in other sectors.  I hope that my analysis was helpful to investors across the years, thank you.

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Comments (8)

Username Already Taken profile picture
Not sure I would buy SUN with new money at these levels but happy to DRIP.

Sun seems risky, but I’m a believer of the business plan, not necessarily of the management.
My cost basis is $6.67 per share. Very happy with this return.
Want to know what a perfect long term stock looks like? One that is up over 50% in one year and 100% in two years while rewarding the shareholder with an 8% distribution. In fact my real distribution is over 10%. If you guessed SUN, you are correct..
I've been in this many years. It matters little to me at this point what the income does on it. The distributions more than have the underlying covered should there be a slump, and so far, so good. So I'm not seeing anything to get worried about.

You can also say with them you've got the business world's coolest logo. That's worth something. They had to pay to buy that you know. It only used to be the most recognizable emblem there was, at the time, on railroad tank cars.

Now, they sold off to 7-11 a number of stores and have been getting paid on those. I don't know if that's ended or not. It might have had something to do with the fact the K-1s had interest income in them. This current K-1 has no interest income, so maybe that's done.

I've noticed another MLP has bought some 7-11 stores. Is it CAPL? I wonder if 7-11 has already re-sold them. How about the author inquire about that. It'd be good to know.

SUN is my personal favorite MLP. I also don't know it's current risk of being rolled up, but was told several years ago by an inside source to not worry about that. Besides, at this point it'd probably be at above my entry price. So no harm done should it go that way.

In other words, if you must get "stuck" this is certainly the way to do it...
USA1963 profile picture
If you add today you'll be "stuck" at 8%. Gas wont be getting much cheaper in the next 3 years. I wish I was "stuck" like this on all my dividend stocks. My avg on SUN is $28.
Great article. As we move to Quad 4...Sunoco is the first on my SELL list..
donpizza profile picture
No growth+high debt+no future=sucker yield. I’m out. Thx Daniel.
Daniel, great article. I don't have a business background and you outlined the concerns extremely well! Keep these coming. Thanks for links too
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