Plains Energy Midstream Buy

Midstream Oil Major ($PAA)

Photo Credit.

We don’t report too often on midstream oil companies. However, it is important to explore all the elements to the oil industry. If you like your oil stocks, and are looking to expand your portfolio, midstream may be a good route. Aimee Duffy explains why this midstream stock is a good pick.

First-quarter results
Revenue climbed across all three of Plains’ business segments: transportation, facilities, and supply and logistics. Overall, revenue was up 20% over last year to $9.22 billion, and earnings per share came in at $1.58.  Analysts expected earnings of $1.52 per share and revenue of $8.46 billion. Profit was also up from $182 million to $230 million over last year.

April wasn’t the cruelest month
Plains was chock-full of announcements in April. The company gave up its seemingly annual hostile takeover bid for its rival, Tulsa, Okla.-based SemGroup. The deal was valued at $1 billion and Plains gave no indication of why it was backing down. You always want what you can’t have, and perhaps this is not the last we’ll hear of this deal.

One deal that did go down was Plains’ acquisition of BP‘s Canadian natural gas liquids assets. Plains picked up 2,600 miles of pipeline, special gas-extracting plants, and storage facilities for $1.67 billion in the deal that closed April 1. Indicative of a strong balance sheet, Plains had enough cash to prefund the acquisition and still begin the second quarter with $2.5 billion in liquidity.

Finally, one of the reasons that midstream master limited partnerships are so enticing for investors is that they typically offer great yields. During the second week of April the company announced it was increasing its quarterly distribution 7.7% per unit. The move brings its yield up to 5.10% and its annualized payout to $4.18 per unit.


PAA has a solid dividend for their investors. If you are looking to expand your oil options, and wanting to find a great dividend, this stock would be a great option. Continue your research here to ensure its a good fit.

Quotes taken from report by Aimee Duffy, Read the entire article here.

This is not an offer to buy or sell securities. Oil investment carries with it very high risks. The information contained within this site has not been nor will it be verified by Envestor First and is subject to change at any time. We are not a United States Securities Dealer or Broker or United States Investment Adviser. Do your own due diligence and consult with a licensed professional before making any investment decisions. Please read our full disclaimer before making any decisions.

Comments are closed.

About ENVESTOR FIRST: Online community of investors, managers and analysts contributing real-time ideas, research, interviews, charts focused on #Oil & #NaturalGas and the #USABoom.