No. 13 (tie) Magellan: Hefty dividend gives midstream firm an advantage
BY LAURIE WINSLOW World Staff Writer
Sunday, September 16, 2012
9/16/12 at 7:35 AM
Magellan Midstream Partners LP's dividend yield was a prime factor that prompted at least one financial adviser to include the company among his top picks.
Brian Smith, a financial adviser with CastleRock Financial Advisors in Collinsville, said dividend yield was a top focus among all his top 10 picks, including Magellan, which has an annual dividend per unit of $3.77.
The oil and refined petroleum transporter company, which went public in February 2001, today owns and operates 10,000 miles in refined petroleum and crude oil pipelines throughout the Mid-Continent.
Magellan assets also include 27 inland terminals, including storage in Tulsa and Cushing, and an ammonia pipeline system.
The company was forecasting volume growth in the petroleum pipeline segment to increase about 5 percent for 2012, Smith said.
Magellan has a couple of pipeline projects it's working on that will add to its system capacity, he added.
The company's pipeline system has access to about 40 percent of the U.S. refining capacity and import capacity. It has a petroleum storage capacity of 80 million barrels, Smith said.
Magellan reported a record $137.8 million in second-quarter net income.
Magellan officials plan to spend $500 million on expansion projects this year with another $200 million earmarked next year to complete them, according to the company's second-quarter earnings statement.
In June, Magellan announced it was looking at forming a new joint venture with Occidental Petroleum Corp. to build a 400-mile pipeline to transport crude oil from west Texas to Houston-area Gulf Coast refineries.
In April, Mike Mears, the company's CEO, told analysts in New York that Magellan was thinking about reactivating an idle pipeline to carry crude oil from Cushing to southern Oklahoma and ultimately to Gulf Coast refineries. Magellan holds 12 million barrels in storage capacity at Cushing, compared to zero three years ago, according to a previous report.
At the end of August, Magellan's board of directors approved a two-for-one split of limited partner units, citing strong growth over the past decade.
The value of Magellan has more than doubled in the past three years, to above $80 per unit.
The partnership has increased its quarterly cash distribution 41 times for a total growth of 259 percent, according to a previous report.
Address: One Williams Center, Tulsa, OK, 74172
Chairman/President/CEO: Michael N. Mears
CFO: John D. Chandler
Symbol (Exchange): MMP (NYSE)
Operation: Primarily involved in the storage, transportation and distribution of refined petroleum products and ammonia.
Original Print Headline: Hefty dividend gives transporter an advantage
Laurie Winslow 918-581-8466
Tanks and a gasoline fueling station in west Tulsa are part of Magellan Midstream Partners' network of 27 terminals and 10,000 miles of pipelines. CORY YOUNG / Tulsa World file