Magellan Midstream Partners (MMP) is an energy company headquartered in Tulsa, Oklahoma. It is engaged in the transportation, storage, and distribution of petroleum products and operates in three segments: refined products, pipeline and terminals, and marine storage.
Magellan Midstream is structured as a Master Limited Partnership (MLP). MLP’s trade like stocks, but avoid paying taxes on their earnings and must distribute at least 90% of that income to partners. That income is paid in the form of a minimum quarterly distribution (MDQ) which is similar to a quarterly dividend. And the yields on MLP’s can be quite attractive. In this low-interest rate environment and with fundamentals in the energy sector improving, the energy-related MLP’s have been on fire this year. Their performance has been reminiscent of last year’s biotech sector.
Magellan Midstream Partners owns the longest refined petroleum products pipeline system in the country. As a result it can tap into nearly 50% of the nation’s refining capacity and store more than 90 billion barrels of petroleum products such as gasoline, diesel fuel, and crude oil.
Magellan Midstream Partners, L.P. assets consist of:
·9,500-mile refined products pipelines with 53 connected terminals & 27 independent terminals
·1,100 miles of crude oil pipelines and storage facilities storing about 18 million barrels
·Marine terminals along coastal waterways storing approximately 27 million barrels
Source: Magellan Midstream Partners, L.P.
I purchased Magellan Midstream in October of 2011 and continue to own it. Since I purchased it for my Income clients, Magellan Midstream has soared in value.
Energy stocks (XLE) continue to do well in the current market environment, up 10.6% year-to-date versus only 4.9% for the S&P 500 Index.
Data from Best Stocks Now app