Plains All American Pipeline LP (PAA) continues its trend of cash distribution increase by announcing a quarterly cash distribution of 95.75 cents per unit on all of its outstanding limited partner units.
The new distribution reflects a 3.2% growth over the quarterly distribution of 92.75 cents per unit paid in February 2010 and an increase of 0.8% from the quarterly distribution of 95 cents per unit paid in November 2010. The new distribution will be paid on February 14, 2011 to unit holders of record as of February 4, 2011.
With the present increment the annualized cash distribution rate climbs to $3.83 per unit, an annualized 3-cent rise from the previous quarter. Plains will need more funds to make payments to its unit holders from $174 million used during the previous quarter.
The partnership has a long history of increasing distributions to unit holders. With this distribution, Plains has increased the quarterly distribution to limited partners in 25 out of the past 27 quarters. Plains’ consistent hike in distribution bespeaks the partnership’s commitment to provide increasing returns to unit holders, leveraging its profitable assets.
Plains’ peer Enterprise Products Partners L.P. (EPD) also increased its quarterly cash distribution rate in October 2010. The increased quarterly distribution of 58.25 cents per unit reflects a growth of 5.4% over the quarterly distribution of 55.25 cents per unit paid in November 2009 and an increase of 1.3% from the quarterly distribution of 57.50 cents per unit paid in August 2010.
Plains All American Pipeline currently retains a Zacks #3 Rank (short-term Hold rating).
Houston, Texas based Plains All American Pipeline owns assets strategically located in well-established oil producing regions, catering to major U.S. refinery and distribution markets. Other than organic growth opportunities, the partnership also relies on acquisitions to spur growth.
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