- Even though Plains All American is not one of our best in class Compounders, it merits owning as a speculative recovery play.
- In March, the distribution was unnecessarily cut in half to $0.72 per year.
- At a 7.5% yield, with coverage of over 3x, we see a high probability of the dividend increasing in 2021, even if oil volumes remain weak.
- Permian volumes were down ~7% in 2020, but even without a volume recovery, Plains offers 50% to 150% potential upside in 1-3 years.
- PAGP can be purchased without having to file a K-1 too.
For further details see:
Plains: Our Top Recovery Idea For 2021