This 6.3%-Yielder Thinks Its Stock Is Getting Too Cheap
Magellan Midstream Partners (NYSE: MMP) has a long history of rewarding income-focused investors. The master limited partnership (MLP) has increased its distribution an impressive 71 times since its initial public offering in 2001, which has helped grow its yield up the current level of 6.3%. The company announced its latest raise this week, boosting the payout by 1% from its prior level, helping fuel full-year growth of 5%.
Usually, consistent dividend growth enables companies to generate market-beating total returns. Magellan, however, hasn't beaten the market in recent years due to all the negativity in the energy sector. Overall, its units are down 12.6% over the past three years, even though it continued growing its earnings and distribution. The MLP's valuation is at a historically low level, and that's leading the company to launch a repurchase program so it can start taking advantage of its cheap price.
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Source Fool.com
