Distribution Growth Guidance among MLPs: ETE, WMB, PAGP, and WGP



Historical distribution

Plains GP Holdings (PAGP) declared a flat distribution of $0.55 per unit for 2Q17, which represents a 10.6% YoY (year-over-year) decline from 2Q16. PAGP announced a distribution cut in 3Q16, while Energy Transfer Equity (ETE) has continued to declare a flat distribution of ~$0.29 per unit for the past seven quarters.

Williams Companies (WMB) also declared a flat distribution of $0.3 per share for 2Q17 and 3Q17. The C corporation announced a massive 68.8% dividend cut in 3Q16, but it has increased its dividend by 50% since 1Q17.

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Western Gas Equity Partners (WGP) is the only GP (general partner) in our select group that has continued to grow its distribution for the past several quarters, despite the challenging energy price environment. It declared a distribution of ~$0.53 per unit for 2Q17, which represented a 7% sequential rise and 22% YoY rise.

Distribution guidance

PAGP (a limited liability company) recently announced a second distribution cut. It expects to declare an annualized distribution of $1.20 per unit in 3Q17, which represents a massive 54.5% decline from its current distribution. At the same time, Plains All American Pipeline (PAA) also announced a 54.5% cut.

WGP expects to grow its distribution by 12%–18% during the 2017–2018 period, while Williams Companies is targeting a dividend growth of 10%–15% for the next several years. ETE has no plans to resume distribution growth in coming quarters, given its high leverage, low distribution coverage, and Energy Transfer Partners’ (ETP) significant growth plans.

In the next part of this series, we’ll look into the balance sheet positions of our four select peers.


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