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GasLog Partners Increases Distributions

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Updated

Dividend yields

GasLog Partners (GLOP) is a LP (limited partnership) with its sponsor GasLog (GLOG). One of investors’ main interests in LPs is high dividend yields. In this article, we’ll assess GasLog Partners’s cash distributions and its dividend yield compared to those of its peers.

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Cash distribution

GasLog Partners declared a cash distribution of $0.49 per share. This was 3% higher than 3Q16’s distribution of $0.48 per share. This represents 11% compound annual growth in distributions since GasLog Partners’s initial public offering. Also, the company’s dividends are significantly higher than its stated minimum dividend of $0.38 per share.

GasLog Partners (GLOP) generated ~$23.5 million in distributable cash flow in 4Q16, which was 10% higher than in 3Q16.

Future expectations

GasLog Partners’s recent increase in distributions was primarily due to its acquisition of GasLog Seattle. Plus, 1Q17 should be the first full quarter of operations for GasLog Seattle, and the company expects to increase another 2% distribution in 1Q17. This brings the company’s total growth to 5% compared to 3Q16.

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Dividend coverage

GLOP’s coverage ratio, which is its distributable cash flow as a percentage of its distribution, was 1.2 in 4Q16. The coverage ratio is a measure of a company’s ability to pay its dividends.

A higher ratio is generally a healthy sign. A ratio of less than 1.0 indicates that a company’s cash flow is less than its dividends paid, which is a sign that its current level of dividends isn’t sustainable in the long run.

GasLog Partners has always outperformed its coverage ratio target of 1.13.

Dividend yield

With a quarterly cash distribution of $0.49, GasLog Partners’s (GLOP) current dividend yield is ~8.8%. The following are the dividend yields for other LNG carrier MLPs:

  • Höegh LNG Partners (HMLP): ~8.3%
  • Golar LNG Partners (GMLP): ~9.4%
  • Teekay LNG Partners (TGP): ~3.1%

The Alerian MLP Index (AMZ) is a leading gauge of energy MLPs. Investors interested in broad exposure to industrials stocks can invest in the SPDR Dow Jones Industrial Average ETF (DIA).

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