Delek Logistics Partners: Positive Momentum Heading Into 2023 And Beyond

Dec. 04, 2022 9:21 AM ETDelek Logistics Partners, LP (DKL)
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Summary

  • Delek Logistics Partners completed their 3Bear Energy acquisition earlier in 2022.
  • They are off to a positive start with their operating cash flow during the third quarter befitting more than 30% versus the first quarter.
  • Whilst their capital expenditure is higher than I expected, this does not derail my outlook for distribution growth in the medium to long term.
  • Elsewhere, their very high leverage will trend lower automatically as more contributions from 3Bear Energy are forthcoming.
  • Thanks to this positive momentum heading into 2023 and beyond, I believe that maintaining my buy rating is appropriate for their high near-8% distribution yield.

Empty asphalt road and New year 2023 concept. Driving on an empty road to Goals 2023 with sunset.

tortoon

Introduction

Following a stellar performance during both 2020 and 2021, Delek Logistics Partners (NYSE:DKL) was leveraging up to boost distribution growth via their 3Bear Energy acquisition earlier in 2022, as my previous article highlighted. Thanks to their

Delek Logistics Partners Ratings

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Delek Logistics Partners Operating Cash Flow

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Delek Logistics Partners Debt Structure

Delek Logistics Partners Q3 2022 10-Q

This article was written by

DT Analysis profile picture
10.64K 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 no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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