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Buckeye Partners, L.P. Message Board

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  • ferdiefor ferdiefor May 9, 2012 7:36 PM Flag

    $46 here we come

    Skip BPL and move into MMP. MMP has gone from distribution growth of 7% to close to 12% this year. S&P just raised price target $10 to $82.

    BPL's problem is they have taken every action MMP did but way too late and it cost dearly. First, MMP bought its GP at 11x ebitda. BPL paid 26x ebitda. Then MMP bought BP Cushing storage assets immediately after BP got into trouble... BPL bought BP assets but paid up big time after BP stabilized. Then BPL bought the Boorco terminal assets and paid waaaaaaaaaaaaay too much for terminal/storage assets.

    BPL is in a huge mess now. Its cost of debt and capital have gotten too high and they are in no position to purchase a highly accretive asset to compensate because none exist and their older petroleum assets in the northeast have zero growth prospects while MMP's gulf assets are the bong.

    It is clear that MMP is the far superior MLP to own for coverage of petroleum-related products.

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