- After enduring five painful years with three distribution reductions, it seems that Plains All American Pipeline has finally bottomed in 2021.
- Whilst it was initially expected that their operating cash flow would be weighed down versus 2020, thankfully it has surprised and remained flat year-on-year.
- This has seen the commentary from management become increasingly supportive for higher distributions in the future.
- When combined with their divestitures, this has helped reduce their leverage and given how close they are to their leverage targets, it makes higher distributions in 2022 likely.
- Since this could see a very high distribution yield of 10%+ on current cost, I believe that upgrading my rating to bullish from neutral is now appropriate.
For further details see:
Plains All American Pipeline: Higher Distributions Coming In 2022, Possible 10%+ Yield