Plains All American, Plains GP started with Buy ratings at Wunderlich

|About: Plains All American Pipelin... (PAA)|By:, SA News Editor

Plains All American Pipeline (PAA +1%) and Plains GP Holdings (PAGP +1.7%) are initiated with Buy ratings at Wunderlich.

PAA offers an attractive balance of current yield and visible near-term distribution growth, while the asset base located in a few of the most prolific U.S. basins is well positioned for long-term growth, the firm says; further, PAA's current price implies a relatively attractive market-based discount rate or annual internal rate of return of 10%.

The firm says PAGP, a levered play on the underlying PAA MLP, offers strong return prospects underpinned by a fee-based crude oil infrastructure business with high growth potential and tax efficient C-Corp structure.