Delek Logistics Partners, LP DKL announced an increase in its quarterly cash distribution rate to 53 cents from 51 cents earlier. The new distribution rate will be effective from the first quarter of 2015 and is scheduled to be paid on May 14, 2015, to unitholders of record as of May 4, 2015.
Delek Logistics has hiked its cash distribution rate in each of the last eight quarters. The last hike in Delek Logistics’ distribution rate was made in Dec 2014 from 49 cents to 51 cents. The partnership’s current annualized cash distribution rate comes to $2.12 per unit, up 3.9% from the prior annualized rate of $2.04 per unit.
The partnership has been performing consistently and has in the process surpassed our earnings estimates in three out of the last four quarters with an average beat of 17.4%.
In Jan 2015, the partnership took strategic steps to strengthen its operations. These measures will add $13.6 million to the partnership’s cash flow in 2015 (read: Delek Logistics Inks Paline Pipeline Deals, Financials Strong).
The additional funds generated during the first quarter were distributed by the partnership, as the partnership agreement stipulates that within 45 days after the end of each quarter, Delek Logistics is required to distribute all of its available cash to its unitholders.
Apart from Delek Logistics Partners, another prominent midstream operator has also increased its cash distribution. Plains All American Pipeline LP PAA recently increased its quarterly cash distribution to 68.50 cents per unit, reflecting a year-over-year hike of 9.3%.
Delek Logistics Partners currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector are Valero Energy Partners LP VLP and EnLink Midstream Partners, LP ENLK. While Valero Energy Partners sports a Zacks Rank #1 (Strong Buy), EnLink Midstream Partners has a Zacks Rank #2 (Buy).
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