Plains All American Pipeline, LP (PAA) boosted its quarterly cash distribution by 2.4% over the distribution paid in Feb 2014. The partnership has increased the quarterly cash distribution to 63 cents per unit from 61.5 cents per unit, bringing the annualized payout to $2.52 per unit.
Plains All American has an impressive distribution payout track record. The partnership has increased its quarterly cash distribution to limited partners in 38 out of the past 40 quarters and consecutively in each of the past 19 quarters.
The partnership is also consistently posting strong results backed by organic growth as well as contribution from its acquired assets. Strong financial results enable Plains All American to fund the incremental payouts. In 2013, cash flow from operating activities was $1.95 billion, up 57.6% from the year-ago level.
The revised annualized yield of the partnership is 4.6%, much higher than the industry yield of 1.85%. For 2014, the partnership aims for a 10% increase in cash distribution per unit from the prior year.
For 2014, Plains All American Pipeline expects capital expenditures for expansion projects to be approximately $1.7 billion and an additional $185 million to $205 million earmarked for maintenance of existing assets. We believe the partnership’s focus on growth projects will allow it to generate adequate funds for consistent distribution of cash among its unitholders.
Currently, the partnership holds a Zacks Rank #3 (Hold). Other players in the industry include Enterprise Products Partners L.P. (EPD), Magellan Midstream Partners LP (MMP) and Spectra Energy Partners, LP (SEP). All of these stocks hold a Zacks Rank #2 (Buy).