This has been a significant year for MPLX LP (MPLX). Since the beginning of 2014, the company’s stock prices have increased by almost 47%.
As noted in Part 8, higher pipeline tariffs and an increased ownership interest in Pipe Line Holdings have contributed much to the company’s impressive earnings, especially in this quarter. Higher earnings are clearly positive for the company’s investors.
On December 1, Marathon Petroleum Corporation (MPC) sold another 30.5% share it had in Pipe Line Holdings, which is basically the MPLX network of pipelines and storage facilities. This raised the MPLX share to 99.5% from the 69% it held previously.
MPLX stock jumped almost 6% in a single day on this announcement. An upbeat earnings report also helped the stock gain. Read Part 7 to discover how MPLX performed in the most recent quarter.
Comparing MPLX stock performance with that of AMLP, SPY, and XLE
As you can see in the graph above, MPLX outperformed the largest MLP ETF, the Alerian MLP ETF (AMLP), the energy sector ETF, the Energy Select Sector SPDR ETF (XLE), and the broader market ETF, the SPDR S&P 500 ETF Trust (SPY).
Indeed, falling oil and gas prices are making investors wary about investing in the energy sector, and rightly so, given the XLE performance. As you can see, the XLE stock is down significantly compared to the stocks of AMLP, SPY, and MPLX.
MPLX performance stands out, and AMLP too could be a smart investment if you’re looking to invest in the oil and gas sector. Although rapidly falling oil and gas prices have adversely affected the XLE, the effects haven’t been that adverse for the midstream MLP companies.
In fact, MLPs currently seem to be energy investors’ favorites. Read It’s raining MLPs: Why the markets are so fond of MLPs for more on this topic.