Plains All American Pipeline (PAA) has risen nearly 40% so far in 2016, outperforming large MLP (master limited partnership) peers Enterprise Products Partners (EPD), Williams Partners (WPZ), and Magellan Midstream Partners (MMP), which have risen nearly 3%, 28%, and 9%, respectively, in 2016. By comparison, the Alerian MLP ETF (AMLP) has risen nearly 3%.
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The above graph compares the YTD (year-to-date) stock performances of EPD, AMLP, MMP, WPZ, and PAA. Crude-centric Plains All American’s stock outperformance in 2016 was driven by a number of factors, including simplification, the recovery in crude oil prices, and a positive outlook for crude oil. Notably, the stock was beaten down significantly in 2015. (You can read more about PAA in Return Potential May Be Up and Away for Plains All American.)
In this series, we’ll compare the performances of the four largest MLPs by market capitalization: EPD, PAA, WPZ, and MMP. (We have not included Energy Transfer Partners [ETP] in the comparison because it’s in the middle of a merger with Sunoco Logistics [SXL]).
We’ll look into the distributable cash flow and distribution growth, leverage, and capital expenditures of each MLP, and we’ll examine current valuations and analyst recommendations for all four. We’ll conclude the series analyze any recent changes in short interest and institutional ownership.
Let’s begin by looking at distributable cash flow trends.