- Global Partners managed to push their distributions back to new heights quickly after reducing them following the onset of the Covid-19 pandemic.
- Whilst this sounds desirable, they do not sport the desirable attributes of a solid income investment.
- Not only is their cash flow performance very volatile, but their financial position also carries very high leverage and thus makes a distribution reduction quite likely.
- Even if their distributions were sustained perpetually into the future in a bullish scenario, there is very limited potential upside remaining.
- This increases the risks of overpaying for their units, and thus, I believe that maintaining my bearish rating is appropriate.
For further details see:
Global Partners: Don't Get Blinded By Their 10% Yield, Very Limited Potential Upside