Trucks load gasoline at Magellan's west Tulsa facility. STEPHEN PINGRY / Tulsa World file
Magellan Midstream Partners LP, a Tulsa-based company that stores, transports and distributes petroleum products and ammonia, should appeal to investors seeking both income and growth.
Magellan has a record of 44 consecutive distribution increases, as well as a current distribution yield close to 4 percent.
In addition, near the end of August, the company's stock was up 25 percent for the year and trading within $2 of its 52-week high.
In Magellan's recent second-quarter earnings report, CEO Michael Mears said the company expects its growth to continue.
"Magellan successfully commissioned two significant industry projects during the second quarter of 2013 - start-up of our Longhorn pipeline with initial crude oil deliveries to the Houston Gulf Coast refining region and beginning condensate deliveries to the Corpus Christi petrochemical market via our Double Eagle pipeline joint venture," he said.
"The start-up of these projects helps frame Magellan's future growth and contributed to our recent increased cash distribution guidance, allowing us to now target annual distribution growth of 16 percent for 2013 and 15 percent for 2014."
That performance outlook is what convinced Phillip Bell, a vice president with Financial Planning Resources in Tulsa, to rank the stock highly for this year's Investment Guide.
"I like this type of business in general," he said. "With all of the new oil and gas production coming on domestically, there's a lot of demand to transport and store product."
Magellan also has caught the attention of several national analysts.
Eduardo Seda, an equity analyst at Ladenburg Thalmann, recently raised his rating on Magellan from "neutral" to "buy." He has a price target of $60 for the stock.
Zacks Equity Research likes the company, too, giving it a "strong buy" recommendation.
"Magellan is worth exploring, given its strong growth in earnings, healthy payout and operation in a business with supportive macro fundamentals," Zacks analysts said. "You don't have to travel the earth to find a good investment prospect with Magellan."
Magellan
Address: One Williams Center, Tulsa, OK 74172
Telephone: 918-574-7000
Web address: www.magellanlp.com
Chairman, CEO: Michael Mears
Symbol (Exchange): MMP (NYSE)
Operation: Stores, transports and distributes petroleum products and ammonia.
John Stancavage 918-581-8314
john.stancavage@tulsaworld.com
Original Print Headline: Magellan stock offers income, growth
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