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BP Midstream Announces 4th Consecutive Distribution Hike

Zacks Equity Research

BP Midstream Partners LP BPMP recently got an approval from the board of directors of its general partner, BP Midstream Partners GP LLC, for fourth-quarter 2018 quarterly distribution of 30.15 cents per unit, representing a sequential hike of 3.4%. The partnership has awarded its unitholders with around $1.13 per unit distribution in 2018.

The distribution of BP Midstream now stands at $1.21 per unit on an annualized basis, which will be paid on Feb 14 to its unitholders on record as of Jan 31, 2019. Based on the closing price of $16.28 as of Jan 23, the fourth-quarter 2018 distribution translates to a yield of 7.4%, higher than the industry’s 7.1%.

Should You Take Advantage of the Hikes?

This event, which marks the partnership’s fourth consecutive quarterly distribution hike since its listing, enabled it to provide its unitholders with mid-teens distribution growth in 2018, in line with its guidance. The partnership has plans to keep up this growth rate through 2020. The Houston, TX-based BP Midstream remains focused on boosting its unitholders’ value through distribution hikes, which display strength in its operations.

Notably, the partnership generated $34.1 million of cash available for distribution in the third quarter and expects the same for full-year 2018 to be at the upper end of the guided range of $140-$145 million. For 2019, it anticipates cash available for distribution in the range of $160-$170 million.

BP Midstream is a growth-oriented master limited partnership, engaged in offering a wide range of midstream services to producers as well as consumers of crude oil, natural gas and refined products. Among many others, it owns stakes in diluent pipelines and refined products’ terminals.

Price Performance

BP Midstream has lost 22.3% in the past year compared with 16.1% collective fall of the industry it belongs to.

Zacks Rank and Stocks to Consider

Currently, the partnership has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks as given below.

Houston, TX-based Shell Midstream Partners, L.P. SHLX is a midstream energy company. For 2019, its bottom line, which has witnessed three upside revisions over the past 60 days, is expected to grow 27.7% year over year. The company currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dallas, TX-based EnLink Midstream Partners, LP ENLK is a midstream energy service provider. The partnership delivered average positive earnings surprise of more than 16% in the trailing four quarters. For full-year 2019, its revenues are expected to rise 17.9% from a year ago. The stock currently has a Zacks Rank #2.

YPF Sociedad Anonima YPF is a Buenos Aires, Argentina-based integrated energy company. Its bottom line for 2018 is expected to increase more than 27% year over year. The company currently has a Zacks Rank #2.

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