MPLX: Higher Distributions Should Only Be Months Away

Aug. 25, 2022 2:12 AM ETMPLX LP (MPLX)20 Comments
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DT Analysis
10.63K Followers

Summary

  • MPLX offered strong results for the first half of 2022, whilst continuing to pay their high 8.50% distribution yield.
  • Their strong cash flow performance continued, with their operating cash flow edging higher year-on-year versus the first half of 2021.
  • This provides ample scope to fund higher distributions, which appear almost certain as their review approaches following the third quarter.
  • Their leverage continued falling even further below their target, although management seemingly ruled out utilizing debt-funded unitholder returns to realign with their target.
  • Given the prospects to collect a high distribution yield that appears poised to grow quite soon, I believe that maintaining my strong buy rating is appropriate.

Money pouring out of a pipe

canakat

Introduction

Upon entering the new year, unitholders of MPLX (NYSE:MPLX) saw very desirable prospects to see their capital returned during 2022, as my previous article highlighted. Whilst the first half still only saw their usual high 8.51% distribution

MPLX Ratings

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MPLX Cash Flows

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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
10.63K 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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