Morningstar Rating

Stock Research and Analysis

by Peggy Connerty

Bulls Say

New projects in the crude segment initiated in the past several years drive throughput and margin growth and support growth in cash distribution.
Despite long-term secular declines in reduced refined products demand, Magellan can still post revenue increases because of attractive annual regulated tariff increases.
Unlike the majority of MLPs, Magellan has no incentive distribution rights, which lowers its overall cost of capital and promotes faster distribution growth over time, all else equal. Read more 

Bears Say

Need for additional product pipelines or storage terminals may subside over the next decade, reducing the pool of projects Magellan can pursue.
Like all partnerships that pay out most of their cash flow, Magellan can't accumulate cash in a war chest, forcing it to depend on external funding sources for growth or acquisitions.
While MMP has limited direct exposure to commodities, 15% of operating margin is from commodity-sensitive operations, primarily butane blending. Long-term, if a lower commodity price environment persists, the butane blending segment will likely face headwinds. Read more 


Michael Mears, chairman of the board, president, and CEO of Magellan's general partner, has been with the company for approximately 30 years and has served in several management roles within the company. Following the simplification of Magellan's capital   Read more 


Magellan Midstream Partners is a master limited partnership that operates pipelines and storage terminals in the central and Eastern United States. Its assets transport,  Read more 

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