Comparing distribution growth
Phillips 66 Partners (PSXP) increased its 3Q17 distribution to 64.6 cents per unit, which represents year-over-year distribution growth of 22.0%. This is 5.0% higher than its 2Q17 distributions. Since its IPO (initial public offering) in 2013, PSXP has increased its distributions for 16 consecutive quarters.
Andeavor Logistics raised its quarterly distribution to ~98.5 cents per unit in 3Q17, which represents year-over-year distribution growth of ~13.0%. Holly Energy Partners raised its quarterly distribution to 64.5 cents per unit in 3Q17, which represents year-over-year distribution growth of 8.4%, exceeding HEP’s distribution growth target of 8.0%.
PBF Logistics raised its quarterly distribution to $0.48 per unit in 3Q17, which represents a year-over-year increase of 9.1%.
PBF Logistics is currently trading at a yield of ~9.0%. Holly Energy Partners and Andeavor Logistics are trading at yields of nearly 8.0% and 7.0%, respectively. In comparison, Phillips 66 Partners currently yields ~4.6%. The SPDR S&P 500 ETF (SPY) (SPX-INDEX) currently yields slightly less than 2.0%.
Attractive yields, along with growing distributions, make these stocks interesting for income investors.
Although Phillips 66 Partners’ yield is the lowest among the four companies, its distribution growth is the highest. PSXP’s distributions grew at a rate of ~5.0% quarter-over-quarter over the last seven quarters.
Andeavor Logistics, which raised distributions ~4.0% every quarter in 2015 and 2016, offered a much lower growth rate in 2017. In 3Q17, its distributions increased by just 1.0% over the previous quarter.