MPLX LP Raises Quarterly Dividend 21 Consecutive Periods (MPLX)
By: Ned Piplovic,
MPLX LP (NYSE:MPLX) has raised its quarterly dividend distribution amount every quarter since it started its quarterly dividend distributions in 2013 and currently offers its shareholders a 7% dividend yield.
Following many midstream energy companies affected by the crude oil price decline in 2015, MPLX saw its share price deteriorate more than 77% between February 2015 and February 2016, which translated to a total loss of more than 25% over the past three years despite the rising quarterly dividends and above-average yields. However, the share price has more than doubled since early 2016 and continues to rise, albeit at a slower pace than it did before the 2015 decline.
On July 25, 2018, the company announced its 21st quarterly dividend hike. MPLX LP will distribute its next quarterly dividend on the August 14, 2018 pay date to all its shareholders of record prior to the August 5, 2018 ex-dividend date.
MPLX LP (NYSE:MPLX)
Headquartered in Findlay, Ohio, MPLX is a diversified master limited partnership formed in 2012 by Marathon Petroleum Corporation (NYSE:MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX engages in gathering, processing, fractionation, storage and transportation of natural gas, natural gas liquids (NGLs), crude oil and refined petroleum products. MPLX owns and operates gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. The company’s storage assets consist of 62 light-product terminals with approximately 24 million barrels of storage capacity, storage caverns with approximately 2.8 million barrels of storage capacity, as well as additional storage facilities – tank farms – in the Midwest and Gulf Coast regions. Additionally, the company supports its transportation and distribution operations with a barge dock facility of approximately 78,000 barrels per day of crude oil and product throughput capacity, an inland marine business, a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Furthermore, MPLX owns additional refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping to provide fuel distribution services to the Marathon Petroleum Corporation.
The company’s share price dropped more than 10% over the first 30 days of the trailing 12-month period but reversed course and ascended towards its 52-week high of $39.12 on January 22, 2018 for a net total gain of nearly 8% above the July 26, 2017 share price. However, as the overall equities markets pulled back on interest rate increase and trade war fears, the company’s share price declined 18% and reached its 52-week low of $32.07 on April 9, 2018. After bottoming out in early April 2018, the share price experienced some volatility but maintained an over all rising trend and closed on July 25, 2018 at $35.78. While that closing price was still 8.5% short of the January peak and 1.3% below the price level from one year earlier, it was 11.6% higher than the 52-week low from April 2018.
The company will boost its quarterly dividend 1.6% from the $0.6175 amount in the previous period to the newly-declared $0.6275 quarterly dividend payout. This new amount is equivalent to a $2.51 annualized distribution and currently yields 7%, which is 52.5% above the company’s own 4.6% average dividend yield over the past five years.
Furthermore, MPLX’s current yield is more than triple the 2.26% average yield of the overall Basic Materials sector and nearly 46% higher than the 4.81% simple average of all the companies in the Oil & Gas Pipelines industry segment.
The company advanced its total annual dividend payout amount more than 140% over the past five years, which corresponds to an average annual dividend growth rate of nearly 20%, or a 4.1% average growth rate every quarter.
Since the share price drop of 2015 delivered a total loss of 27% over the past three years, the share price recovery combined with the rising dividend income distributions helped to return the shareholders’ total return into a positive territory with a 4.1% return over the past 12 months. The five years total return was 20.6%.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.