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Magellan Midstream Partners LP with the ticker MMP is a large-cap oil and gas midstream company operating in the energy business sector. This is the second of five energy sector candidates competing for the fifty-first slot in my Viital folio. It is my first report on MMP for my Viital portfolio. I may have mentioned MMP once in previous reports.

Magellan Midstream Partners is a master limited partnership that operates pipelines and storage terminals in the Central and Eastern United States. 

Its assets transport, store, and distribute refined petroleum products and crude and earn a fee-based stream of cash flows. 

Assets include the country's longest petroleum pipeline network and several crude oil pipelines. Refined products make up about 70% of the operating margin, with the remainder mainly crude-oil pipelines.

As of December 31, 2021, it had a 9,800-mile refined products pipeline system with 54 terminals; approximately 2,200 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 39 million barrels; and two marine terminals. 

The company was incorporated in 2000 and is headquartered in Tulsa, Oklahoma.

Three key data points gauge any dividend equity or fund, such as Magellan Midstream Partners LP:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 
 

MMP Price

Magellan’s price per share was $50.97 after yesterday’s market close.  One year ago its price was $45.99 So, Magellan’s share price rose by $4.98 or about 11% in the past year. 

If Magellan’s stock trades in the range of $40.00 to $60.00 this next year, its recent $50.97 share price might rise by $4.53 to reach $55.50 by next year. My $4.53 upside estimate is $0.47  under the median of annual price target upsides projected by 14 analysts tracking Magellan’s stock prices for brokers.
 

MMP Dividends

Magellan’s most recently declared quarterly dividend of $1.038 per share was paid on August 4th to shareholders on record as of July  24th.  

Since April 2001 MMP has paid quarterly dividends, increasing annually. The current forward-looking annual dividend of $4.15 casts an annual yield of 8.15% as of yesterday’s $50.97 share price.
 

MMP Returns

Adding the $4.15 MMP annual dividend to my estimated one-year price upside estimate of $4.53 shows an $8.68 potential gross gain, per share, to be reduced by any costs to trade Magellan shares.  

At yesterday's $50.97 closing price, a little over $1000 would buy 20 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at the sale and might cost us $0.50 per share.

Subtract that maybe $0.50 brokerage cost from my estimated $8.68 gross gain estimate per share results in a net gain of $8.18 X 20 shares = $163.60 for a 16% net gain including an 8.15% forward-looking annual dividend yield. 

Over the next year, our $1K investment in Magellan Midstream Partners LP shares could generate $81.50 in cash dividends. Of course, a single share MMP stock bought at yesterday's $50.97 price is about tone and a half times less than the dividend income from our $1000.00 investment. 

So, by my dogcatcher ideal, this is a positive time to acquire MMP shares based on their forward-looking dividends for the year 2022. The forecast annual dividend from $1K invested is 1.6 times greater than yesterday’s single share price. Consider yourself alerted. Now is the time.

All of the estimates above are speculation based on the past history of Magellan Midstream Partners LP. Only time and money invested in this stock will determine its market value.

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