USDP - USD Partners: The 8.50% Yield Looks Set To Grow Soon

• The crude oil by rail-focused USD Partners seems rather overlooked along with their sustainable high 8.50% distribution yield.
• Despite seeing non-cash impairments during 2020, they performed very well with their operating cash flow increasing almost 20% year on year.
• Management seems positive regarding the outlook for 2021, which sets them up well to grow their distributions higher quite soon.
• By the end of the third quarter of 2020, they should have deleveraged down into the moderate territory and thus have scope to materially increase their distributions.
• Given this positive outlook and continued strong performance, it should be of little surprise that I will be maintaining my bullish rating.

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