Daily Stock Analysis: Magellan Midstream Partners (MMP)

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Magellan Midstream Partners LP bears the ticker symbol MMP, and this is my first mention of MMP for the new Viking Portfolio. However, I have discussed it in some of my previous Dog of The Week Portfolios.

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 produce about 70% of the operating margin, with the remainder mainly from crude-oil pipelines.

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

Three key data points gauge 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 $50.24 at Tuesday’s market close. In the past year, Magellan’s share price increased by $3.80 or about 8.2%.

If MMP’s stock trades in the range of $45.00 to $56.00 this next year, its recent $50.24 share price might reach $55.00 by next year. My upside estimate of $4.76 is exactly $0.93 under the one-year target estimate from fifteen analysts covering MMP for brokers.

MMP Dividends

Magellan’s most recent Quarterly dividend of $1.048 equates to an annual dividend of $4.19 to cast an annual yield of 8.34%.

MMP Returns

Adding the $4.19 annual estimated MMP dividend to my one-year price upside estimate of $4.76 reveals an $8.95 potential gross gain per share.

At Friday’s $50.24 closing price, a little over $1000 would buy 20 shares.

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

Subtracting that maybe $0.50 brokerage cost from my estimated $8.95 gross gain makes a net gain of $8.45 X 20 shares = $169.00 for a 16.9% net gain including an 8.134% annual dividend yield.

In the next year, our $1K investment in shares of Magellan Midstream Partners LP should generate $83.40 in cash dividends. Of course, a single share of MMP stock at Tuesday's $50.24 price is about $33.16 less than the annual dividend income from our $1000.00 investment.

So, by my dogcatcher ideal, this is a good time to buy Magellan shares based on their dividends for 2023. The current dividend from $1K invested is $33.16 more than Magellan’s single share price. Consider yourself alerted.

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

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Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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