In this article, we discuss 5 best MLP dividend stocks to buy. If you want to read our detailed analysis of MLPs and their performance over the years, go directly to read 10 Best MLP Dividend Stocks to Buy.
5. Magellan Midstream Partners, L.P. (NYSE:MMP)
Dividend Yield as of October 17: 8.39%
Magellan Midstream Partners, L.P. (NYSE:MMP) is an Oklahoma-based partnership that specializes in ammonia and petroleum pipelines in the Mid-continent oil province. In August, the company announced the expansion of its refined petroleum products pipeline system to El Paso, Texas. It expects to spend over $125 million on the project, which will be completed by 2024.
Magellan Midstream Partners, L.P. (NYSE:MMP) is one of the best dividend stocks on our list as the company has been raising its dividends consistently for the past 20 years. It currently pays a quarterly dividend of $1.0375 per share and has a dividend yield of 8.39%, as of October 17. In Q2 2022, the company reported a strong cash position, with its free cash flow of $649 million, compared with $507 million during the same period last year. For FY22, Magellan Midstream Partners, L.P. (NYSE:MMP) expects to generate a free cash flow of $1.45 billion, or $578 million after distributions.
Ahead of the company’s Q3 results, Barclays reiterated its Equal Weight rating on Magellan Midstream Partners, L.P. (NYSE:MMP) in October.
At the end of Q2 2022, 9 hedge funds tracked by Insider Monkey owned stakes in Magellan Midstream Partners, L.P. (NYSE:MMP), compared with 11 in the previous quarter. These stakes have a total value of over $17.7 million. First Eagle Investment Management was the company’s leading stakeholder in Q2.
4. Crestwood Equity Partners LP (NYSE:CEQP)
Dividend Yield as of October 17: 9.00%
Crestwood Equity Partners LP (NYSE:CEQP) is a Texas-based MLP that owns and operates midstream assets. The company is also engaged in the transportation and storage of natural gas and crude oil. In Q2 2022, the company reported revenue of $1.45 billion, which showed a 56% growth from the same period last year. Its net income for the quarter also jumped to $39.4 million, from $38.1 million in the prior-year quarter. The company’s distributable cash flow to common unitholders amounted to $108.1 million.
Crestwood Equity Partners LP (NYSE:CEQP) currently pays a quarterly dividend of $0.655 per share, with a dividend yield of 9.00%, as recorded on October 17. The company last raised its dividend in April 2022, which was its first dividend hike after the pandemic.
In May, Truist initiated its coverage on Crestwood Equity Partners LP (NYSE:CEQP) with a Buy rating and a $36 price target.
At the end of Q2 2022, PEAK6 Capital Management was the only hedge fund having stakes in Crestwood Equity Partners LP (NYSE:CEQP), valued at $37,000.
3. MPLX LP (NYSE:MPLX)
Dividend Yield as of October 17: 9.00%
MPLX LP (NYSE:MPLX) is an Ohio-based diversified MLP that owns and operates midstream energy infrastructure and logistics assets. The company is one of the best dividend stocks on our list as it has been raising its dividends consistently for the past eight years, with a five-year CAGR of 5.70%. It currently pays a quarterly dividend of $0.705 per share for a yield of 9.00%, as of October 17.
In the second quarter of 2022, MPLX LP (NYSE:MPLX) reported a strong financial position as it announced a share repurchase program worth $1 billion. The company generated $1.5 billion in operating cash flow, up from $1.1 billion during the same period last year. It returned $750 million to shareholders through dividends and share repurchases, which shows its stable cash flow.
In September, BofA maintained its $34 price target on MPLX LP (NYSE:MPLX), which implies a 10% upside. The firm raised concerns about the company’s execution in the coming quarters.
At the end of June 2022, 7 hedge funds in Insider Monkey’s database owned stakes in MPLX LP (NYSE:MPLX), compared with 8 in the previous quarter. These shares are collectively valued at over $39 million. Citadel Investment Group is the leading stakeholder of the company in Q2.
2. CrossAmerica Partners LP (NYSE:CAPL)
Dividend Yield as of October 17: 11.04%
CrossAmerica Partners LP (NYSE:CAPL) is an American MLP that distributes branded petroleum for motor vehicles in the country. In Q2 2022, the company reported strong results and a solid cash position. Its distributable cash flow for the quarter stood at $32.4 million, compared with $25 million in the prior-year quarter. The company’s revenue of $1.48 billion showed a 72.2% year-over-year growth. At the end of June, it had $3.5 million in cash and cash equivalents and $135.4 million in total current assets.
CrossAmerica Partners LP (NYSE:CAPL) has paid regular dividends to shareholders since 2015. The company does not have a dividend growth streak but its payments remained consistent even during the pandemic. It currently pays a quarterly dividend of $0.525 per share, with a dividend yield of 11.04%, as of October 17.
At the end of Q2 2022, Citadel Investment Group was the only hedge fund holding stakes in CrossAmerica Partners LP (NYSE:CAPL), with a total value of $228,000.
1. USA Compression Partners, LP (NYSE:USAC)
Dividend Yield as of October 17: 11.84%
USA Compression Partners, LP (NYSE:USAC) is a publicly-traded MLP that mainly provides natural gas compression services under term contracts. The company also manages its compression units and maintains related inventory.
In Q2 2022, USA Compression Partners, LP (NYSE:USAC) reported an operating cash flow of over $94.2 million, compared with $99.5 million during the same period last year. The company’s distributable cash flow came in strong at $55.6 million, up from $52.5 million in the prior-year quarter. Its total revenues of $171.5 million showed a 9.5% year-over-year growth.
USA Compression Partners, LP (NYSE:USAC) currently pays a quarterly dividend of $0.525 per share for a dividend yield of 11.84%, as recorded on October 17. In July, Mizuho initiated its coverage on the stock with a Neutral rating and an $18 price target, calling the firm one of the largest domestic providers of natural gas compression.
At the end of Q2 2022, PEAK6 Capital Management was the only shareholder of USA Compression Partners, LP (NYSE:USAC), owning stakes worth $427,000.
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