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MarkWest Energy Hikes Distribution

Zacks Equity Research

MarkWest Energy Partners LP (MWE), a processor and distributor of natural gas, raised its fourth-quarter 2013 cash distribution 1.2% sequentially and 4.9% year over year to 86 cents per common unit ($3.44 per unit annualized).

MarkWest Energy added that the new distribution will be paid on Feb 14, 2014 to unitholders of record as of Feb 6, 2014.

The distribution hike reflects the partnership’s continued strong performance, backed by strong operating results, good investments and a diligent execution of its strategic plan.

MarkWest Energy is planning to declare its fourth-quarter 2013 financial results on Feb 26, 2014, after the closing bell. The Zacks Consensus Estimate for the partnership’s fourth-quarter stands at 24 cents per common unit.

Denver, Colorado-based MarkWest Energy, a master limited partnership (MLP), is engaged in the gathering, processing and transmission of natural gas, transportation, fractionation and storage of natural gas liquids (NGLs), and the gathering and transportation of crude oil. The partnership is one of the largest processors of natural gas in the Appalachian region and has a significant presence in the other prolific natural gas producing basins of the U.S., including the Anadarko, Arkoma, East Texas, and Gulf Coast basins.

We like MarkWest Energy’s high-quality and diverse portfolio of midstream assets, which generate stable and recurring revenues through long-term fee-based contracts.

However, acquisitions have historically played a major role in the partnership’s growth profile and are expected to remain significant. MarkWest Energy may find it difficult to complete accretive transactions in the future, which could negatively impact its growth rate.  

MarkWest Energy currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in-line with the broader U.S equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the energy sector like Swift Energy Co. (SFY), Athlon Energy Inc. (ATHL) and Pembina Pipeline Corporation (PBA). All the stocks sport a Zacks Rank #1 (Strong Buy).
 

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