Is Magellan Midstream Partners Stock Set for Higher Returns?
Magellan Midstream Partners’ YTD fall in 2017
Currently, Magellan Midstream Partners (MMP) is trading 7% down from the price at the beginning of 2017. Other midstream energy companies like Enterprise Products Partners (EPD) and Plains All American Pipeline (PAA) have fallen 2% and 33%, respectively, during the same period. In comparison, Williams Partners (WPZ) has risen 1% YTD (year-to-date). The Alerian MLP ETF (AMLP) has fallen 11% since the beginning of 2017.
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Magellan Midstream is trading above its 50-day moving average, but below its 200-day moving average. Its 200-day average might act as a resistance for the stock in the near term. After largely trading below its 50-day moving average since March 2017, Magellan Midstream Partners crossed above the key average in September 2017. It has stayed above the moving average since September.
Headquartered in Tulsa, Oklahoma, Magellan Midstream Partners transports, stores, and distributes refined petroleum products and crude oil in the US.
Magellan Midstream owns one of the longest refined petroleum products pipeline systems in the US. It has a storage capacity of more than 95 MMbbls (million barrels) of petroleum products.
Magellan Midstream has ~9,700 miles of pipeline for refined products and LPG (liquefied petroleum gases) in the US extending from the Gulf Coast and covering 15 states across the central US. It includes 42 MMbbls of storage capacity.
Magellan Midstream also operates five marine terminals located along coastal waterways with a total storage capacity of ~26 MMbbls. The above map shows Magellan Midstream’s business assets in the US. It doesn’t have any IDRs.
In this series, we’ll analyze Magellan Midstream Partners. We’ll discuss its price targets, the performance of its various segments, fee-based business, its leverage, distributable cash flows, capital expenditures, and distribution growth.
In the next part, we’ll analyze how Magellan Midstream Partners’ segments performed.