PAA - MLP Q4'18 Distribution Coverage... Now Featuring Payout Ratios!
By Stacey Morris
Last week's piece recapped 4Q18 distribution trends for midstream MLPs, and this week we look at the ability of MLPs to afford those distributions. Historically, when exploring this topic, we have only focused on distribution coverage, which compares distributable cash flow ((DCF)) generated in a period to distributions paid. Today, we are incorporating payout ratios in addition to distribution coverage metrics. Why? Distribution coverage is an example of MLP jargon that is admittedly less than user-friendly. As we discussed in our 2019 outlook video, we see generalists or new investors entering