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Phillips 66 Partners LP Message Board

  • sho261 sho261 Sep 4, 2013 10:58 AM Flag


    This is not meant to be negative, although I am sure someone will be offended but why do you guys think this will double or triple within a year? If you look at PSXP peers and what the average yield they are paying PSXP seems to be fairly valued at $19-$20 at best (.85 yearly dividend yields less than 5%).. Oh, I know, factor in the drop downs and if that were to happen within the next 12 months, earnings are still going to value this at maybe $22-$23 on a relative basis. So why own this low dividend MLP now let alone think this will double or triple within a year? Come on guys what am I missing?

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    • I think people are willing to pay a rich premium for PSXP because they will have a very solid GP and some nice drop downs and expect the initial $0.85 - $0.90 distribution to grow by leaps and bounds over the years. So while right now it yields a paltry 2.9%, people are looking at an optimistic future. I dipped my toe in the water at this price level but will really get interested if the price goes down to $25.

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