SUN - Sunoco: Distributions Still Stuck Despite Pain At The Pump

• After Sunoco impressively sustained their distributions throughout the turmoil of 2020, they were nevertheless looking safe but stuck in place as the end of 2021 approached.
• Despite oil and thus fuel prices recently surging to heights not seen for almost a decade, it does not help their fuel-related partnership.
• They produce steady cash flow performance thanks to the inverse correlation between their margins and volumes, thereby giving stability at the expense of less potential upside.
• Elsewhere, they saw good results during 2021 and their guidance for 2022 points towards modest growth.
• Despite being positive, their distributions still appear stuck with minimal scope to fund higher payments and thus as a result, I believe that maintaining my hold rating is appropriate.

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