Magellan Midstream Partners (MMP) generous dividend clearly classifies it as one of the highest paying dividend stocks. But is it one of the best monthly dividend stocks. We answer this question in the following report.
Magellan Midstream Partners (MMP) is a master limited partnership (MLP) that transports, stores and distributes crude oil and refined products in up to 15 states mainly through crude oil and refined product pipeline systems. It also owns marine terminals in four states that store and distribute petroleum products such as gasoline, diesel, crude and jet fuel.
MMP is a very good example of how the fundamental risk in a firm’s business is not always transmitted to the price of its stock (or units if it is organized as an MLP). Demand for MMP’s services are fickle and its sales are quite erratic. And yet its beta is significantly below average (beta = 0.68). This can make analyzing companies like MMP difficult to do (if you do not subscribe to CAPM).
Our opinion of MMP can be summed up succinctly with the following words. MMP is a high quality but expensive master limited partnership. Its dividend yield is quite high in absolute terms; but relative to its industry, it is quite low.
Overall, we feel that MMP’s fundamentals are not remarkable. Its dividend appears safe and shows good growth prospects. But its high price already factors in most of these admirable features. And overall, Magellan Midstream Partners provides no great bargain.
Stat Sheet – Magellan Midstream Partners 4/7/16
|Industry||Oil Well Services & Equipment|
|Market Cap||$ 14,818|
|Financial Strength||Above Average|
|Price Volatility||Below Average|
There are other top dividend paying stocks that do provide better bargains. To see them, click on the following link.