PSXP - Phillips 66 Partners: 2021 Shaping Up Positively For Distributions But Margin Of Safety Remains Thin

• Phillips 66 Partners has released guidance for 2021 with their capital expenditure decreasing significantly.
• This will help rectify their one weak point, being their historically very weak distribution coverage.
• Unfortunately, their distributions will remain risky, because at best, this will still only leave them a thin margin of safety, plus the uncertainties surrounding the Dakota Access Pipeline.
• Thankfully, their leverage is only moderate, and thus they still have the flexibility to handle 2021 and shoulder more debt if required.
• Given their positive direction, I believe that maintaining my bullish rating is appropriate.

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