Plains All American Pipeline LP (PAA) extended its practice of sharing more benefits with its unitholders through the increase of the cash distribution rate. The partnership announced a new quarterly cash distribution rate of 99.5 cents per unit on all of its outstanding limited partner units.
The partnership has a long history of increasing distribution to unit holders. With this distribution, Plains has increased the quarterly distribution to limited partners in 28 out of the past 30 quarters. Plains' consistent hike in distribution bespeaks the partnership's commitment to provide increasing returns to unit holders, leveraging its profitable assets.
The new distribution reflects a 1.3% growth over the quarterly distribution of 98.25 cents per unit paid in August 2011 and an increase of 4.7% from the quarterly distribution of 95 cents per unit paid in November 2010. The current distribution will be paid on November 14, 2011, to unit holders of record as of November 4, 2011.
Plains reported strong second quarter results which surpassed the year-ago performance as well as our expectation. The partnership is optimistic about maintaining its growth momentum for the remainder of the year and raised its 2011 fully-adjusted EBITDA guidance to $1.384 million, which reflects a sharp increase of 13% from its initial EBITDA guidance of $1.225 billion.
Enterprise Products Partners LP (EPD), a Plains All American peer, also increased its quarterly cash distribution rate in July 2011. The increased quarterly distribution of 60.50 cents per unit, paid in August 2011, represented a growth of 5.2% over the quarterly distribution of 57.50 per unit paid in August 2010 and an increase of 1.3% from the quarterly distribution of 59.75 cents per unit paid in May 2011.
Plains All American Pipeline currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. The partnership competes with Enterprise Products Partners LP and Sunoco Logistics Partners L.P. (SXL).
Houston, Texas-based Plains All American is engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. The partnership is also involved in the development and operation of natural gas storage facilities.
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