MPLX - This 8.3%-Yielding Dividend Stock Has Plenty of Fuel to Continue Producing Prodigious Amounts of Passive Income
2024-05-04 08:21:10 ET
MPLX (NYSE: MPLX) doesn't get the credit it deserves. The master limited partnership (MLP) has been a top-notch passive income producer since its formation over a decade ago. The midstream company has increased its payment every year, growing it by over 380%.
The MLP currently offers an 8.3% distribution yield , putting it several times higher than the S&P 500 's 1.4% dividend yield. That prodigious payout is on an extremely firm financial foundation. Because of that and the pipeline company's visible growth prospects, it should have plenty of fuel to continue growing its big-time passive income stream. That makes it an ideal option for those seeking steadily rising cash flow and who are comfortable with the potential tax implications of investing in MLPs (such as their sending a Schedule K-1 each year instead of a Form 1099-DIV).
MPLX recently reported its first-quarter results. The midstream giant continues to generate strong, durable cash flow. It produced nearly $1.4 billion in distributable cash flow in the period , an 8% increase from last year's first quarter. It was enough cash to cover the company's lucrative distribution by a comfy 1.6 times. That matches the year-ago coverage ratio even though the company boosted its payout by 10% late last year.
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This 8.3%-Yielding Dividend Stock Has Plenty of Fuel to Continue Producing Prodigious Amounts of Passive Income