MPLX LP's Dividend Analysis
Assessing the Sustainability and Growth of MPLX LP's Dividend
MPLX LP (NYSE:MPLX) recently announced a dividend of $0.85 per share, payable on 2024-02-14, with the ex-dividend date set for 2024-02-02. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into MPLX LP's dividend performance and assess its sustainability.
What Does MPLX LP Do?
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MPLX LP is a partnership that owns both pipelines and gathering and processing assets with extensive holdings in the Appalachian region. The asset base is made up of pipeline assets dropped down from Marathon Petroleum, its sponsor, and gathering and processing assets from MarkWest, which it acquired in 2015. MPLX LP also acquired Andeavor Logistics in July 2019.
A Glimpse at MPLX LP's Dividend History
MPLX LP has maintained a consistent dividend payment record since 2013, distributing dividends on a quarterly basis. The company has increased its dividend each year since its inception, earning it the status of a dividend achiever. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down MPLX LP's Dividend Yield and Growth
MPLX LP currently has a 12-month trailing dividend yield of 8.22% and a 12-month forward dividend yield of 8.81%, indicating an expectation of increased dividend payments over the next year. Over the past three years, MPLX LP's annual dividend growth rate was 2.90%, which increased to 5.00% per year over a five-year horizon. Consequently, the 5-year yield on cost for MPLX LP stock is approximately 10.49%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of MPLX LP's dividend is evaluated by examining the company's payout ratio. As of 2023-12-31, MPLX LP's dividend payout ratio is 0.83, which may raise concerns about the sustainability of the company's dividend. However, MPLX LP's profitability rank is 7 out of 10, indicating good profitability prospects and consistent net profit over the past decade.
Growth Metrics: The Future Outlook
MPLX LP's growth rank of 7 out of 10 suggests a positive growth trajectory. Although MPLX LP's revenue per share and 3-year revenue growth rate indicate a strong revenue model, the growth rate underperforms approximately 65.73% of global competitors. The company's 3-year EPS growth rate also underperforms approximately 54.66% of global competitors. Lastly, MPLX LP's 5-year EBITDA growth rate, while substantial, underperforms approximately 35.75% of global competitors.
Next Steps
Considering MPLX LP's consistent dividend payments, modest dividend growth rate, concerning payout ratio, strong profitability, and mixed growth metrics, investors should weigh these factors carefully. MPLX LP's ability to maintain and potentially increase dividends may hinge on its continued profitability and strategic initiatives to boost growth metrics. As value investors look to the future, they must consider whether MPLX LP's current dividend policy is both sustainable and indicative of the company's long-term financial health. For those seeking high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for further research.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
