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BPL, NS, EEP, ANDX: Distribution Growth Guidance

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Jan. 2 2018, Updated 8:44 a.m. ET

Historical distribution

Buckeye Partners (BPL) declared a flat distribution of $1.26 per unit in 3Q17 after 18 consecutive quarters of distribution growth. NuStar Energy (NS) declared a flat distribution of $1.10 per unit for a 25th consecutive quarter.

Enbridge Energy Partners (EEP) also declared a flat distribution in 3Q17, of $0.35 per unit, which represents a 40.0% decline from 3Q16. EEP announced a distribution cut that took effect in 2Q17.

Andeavor Logistics (ANDX) is the only MLP among the selected peers that has grown its distribution for the past several quarters. It declared a distribution of $0.99 per unit in 3Q17, which represented a 1.4% sequential increase and 12.6% increase from 3Q16.

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Distribution guidance

Considering their weak distribution coverage ratios, Buckeye Partners and NuStar are less likely to resume distribution growth in 2018. NuStar may have to go for a distribution cut in the coming quarters if crude oil prices fall significantly.

ANDX will likely continue distribution growth in 2018, considering its strong earnings growth guidance and impressive distribution coverage, and EEP expects to grow its distributable cash flow per unit by 3% over the next three years. This growth might translate into distribution growth if the company maintains a distribution coverage of 1.2x. In the next article, we’ll look into the four selected peers’ balance sheets.

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