Why I like PSXP....in the past, MPL's typically operated in a single oil/gas sector of the supply chain, I.E. upstream gathering, exploration, services drilling, fracking or well operations, mid stream transportation of energy from well head through pipelines to storage at refinery's, downstream at the refinery, finished products through consumer markets for distribution. The current trend is for MLP's to combine assets joining other in deals, buy outs, etc., to gather assets across the entire sector from exploration, well head upstream, midstream assets, to refinery, and on to consumer distribution. Phillips 66 and partners are creating this business entity to control all the assets for the benefit of the entire supply process chain. PSXP is a big part of their plan to accomplish this goal. Other MLP operations are joining forces to do the very same thing, the whole industry is consolidating into large control groups controlling assets through the whole supply chain.
It may drop back a tad after the ex-divvie date......your call, but the dividend will most likely offset any share decline. Long term play, refinery's have ticked up some lately overall. I expect some more assets to drop down in the first quarter 2014. A long term play with growth, this is the way MPL's grow. Good advice from sho261, don't go all in on the first buy, this is a very fragile market as 3rd Qtr earnings are coming in bad news for the broad S&P could set things back. It could easily go back 5% to the mid/high $31 range.
There will be many new entry points for PSXP in the coming years, invest no more than 5% of the portfolio into a single stock, take a look at CLMT Calumet Specialty Processing if you like refinery stocks, a value now with a great dividend, a new refinery being built and on line in the near future. Raising dividends for the last five years, one of my core holdings trading at $31.45 ish and off it's 52 week high of $40.25
Dollar cost average in. Depending upon on how large the $$$ you are working consider buying a little now before X to get the dividend. Buy another tranche on X dividend day and wait 30 days and buy your last third. Another way, if you are making regular contributions on a monthly basis into your IRA is to buy each month with the same dollar amount until you reach your desired share goal. Remember to have the dividends reinvested for max return. GL