Delek Logistics Partners, LP (DKL) announced that its board of directors has approved to increase its quarterly cash distribution rate to 41.5 cents from 40.5 cents earlier. The new distribution rate will be effective from the fourth quarter of 2013 and is scheduled to be paid on Feb 13, 2014, to unitholders of record as of Feb 4, 2014.
The last hike in Delek Logistics’ distribution rate was made in Oct 2013 from 39.5 cents to 40.5 cents. The current annualized cash distribution rate of the partnership comes to $1.66 per unit, up 2.5% from the prior rate of $1.62 per unit.
The partnership has been performing consistently and has in the process surpassed our earnings estimates in the last three quarters with an average beat of 11.9%. The strong performance and financial flexibility have enabled Delek Logistics’ management to increase the quarterly cash distribution at regular intervals.
The financial strength has also allowed management to expand its business by acquiring two assets during the third quarter of 2013. Moreover, the partnership completed the purchase of a terminal in North Little Rock, Arkansas in Oct 2013.
Apart from Delek Logistics Partners, other midstream operators have also increased their cash distribution. Plains All American Pipeline LP (PAA) recently increased its quarterly cash distribution to 61.50 cents per unit, reflecting an annual hike of 9.3%. ONEOK Partners (OKS) increased its quarterly distribution rate to 73 cents, up 0.7% annually.
Delek Partners currently has a Zacks Rank #4 (Sell). A better ranked stock in the same sector is Energy Transfer Partners, L.P. (ETP) with a Zacks Rank #2 (Buy).