2024-07-16 09:00:00 ET
Summary
- MPLX LP has strong barriers to entry in the energy infrastructure sector, with a system designed to move large volumes of crude and refined products daily.
- Despite risks from breakthroughs in renewables and political factors, data indicates a bullish future for MPLX due to increasing energy demand.
- MPLX's high-margin business, profitability, and growth strategy position it well for increased distributions and buybacks, making it a strong investment opportunity.
MPLX LP ( MPLX ) has been one of the midstream operators I was bullish on for some time. In March, I turned neutral as I believed the valuation was getting a bit stretched, but I am turning bullish on MPLX once again. The barriers to entry are immense within the energy infrastructure sector, and MPLX has developed a system that is difficult to replicate as it's designed to move millions of barrels of crude and refined products through its pipelines each day. MPLX returned nearly $1 billion to its unitholders through distributions and buybacks during Q1 as it's operating a high-margin business. Now that we have more economic data, and it looks like the Fed will pivot in September, I believe MPLX is in a prime position to benefit in the 2 nd half of 2024 and throughout 2025. I think investors will get an 11 th year of distribution increases next quarter, and MPLX will continue buying back units on the open market. While MPLX has rebounded from its pandemic lows and has been up just over 20% over the past year, I believe its units will continue to increase, and investors can benefit from capital appreciation while generating a large yield from the growing distribution....
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MPLX: Back On The Bullish Train Yielding Over 8%