Magellan Midstream Partners (NYSE:MMP) - Share price, News & Analysis

MMP fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	2/6
Financial Health	3/6
Dividends	5/6

MMP Stock Overview

Magellan Midstream Partners, L.P. engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States.

Rewards

Trading at 28.1% below our estimate of its fair value

Earnings are forecast to grow 6.31% per year

Risk Analysis

Has a high level of debt

Dividend of 8.21% is not well covered by earnings

Significant insider selling over the past 3 months

Magellan Midstream Partners Competitors

Enterprise Products Partners

NYSE:EPD

US$57.7b

Kinder Morgan

NYSE:KMI

US$44.0b

Williams Companies

NYSE:WMB

US$43.2b

Energy Transfer

NYSE:ET

US$35.0b

Price History & Performance

Summary of all time highs, changes and price drops for Magellan Midstream Partners
Historical stock prices
Current Share Price	US$50.57
52 Week High	US$53.85
52 Week Low	US$43.58
Beta	0.96
1 Month Change	-0.47%
3 Month Change	4.33%
1 Year Change	2.66%
3 Year Change	-19.45%
5 Year Change	-32.27%
Change since IPO	742.83%

Recent News & Updates

May 12

Magellan Midstream Partners: Attractive, But Risky

Without much doubt, Magellan Midstream Partners has a wide economic moat due to the cost advantages stemming from its pipeline. However, the company is also facing major risks like high debt levels and the threat of switching to alternative energy sources. If I had to choose between being bearish and bullish, I would rather choose the latter, but Magellan Midstream Partners is not a bargain right now.

Shareholder Returns

	MMP	US Oil and Gas	US Market
7D	6.2%	8.2%	2.7%
1Y	2.7%	53.4%	-8.1%

Return vs Industry: MMP underperformed the US Oil and Gas industry which returned 47.8% over the past year.

Return vs Market: MMP exceeded the US Market which returned -10.8% over the past year.

Price Volatility

Is MMP's price volatile compared to industry and market?
MMP volatility
MMP Average Weekly Movement	3.9%
Oil and Gas Industry Average Movement	8.7%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	2.9%

Stable Share Price: MMP is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: MMP's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2000	1,715	Aaron Milford	https://www.magellanlp.com

Magellan Midstream Partners, L.P. engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. It operates through Refined Products and Crude Oil segments. The company operates refined products pipeline that transports gasoline, diesel fuel, aviation fuel, kerosene, and heating oil to wholesalers, retailers, traders, railroads, airlines, and regional farm cooperatives; and to end markets, including retail gasoline stations, truck stops, farm cooperatives, railroad fueling depots, military bases, and commercial airports.

Magellan Midstream Partners Fundamentals Summary

How do Magellan Midstream Partners's earnings and revenue compare to its market cap?
MMP fundamental statistics
Market Cap	US$10.47b
Earnings (TTM)	US$881.60m
Revenue (TTM)	US$2.78b

12.1x

P/E Ratio

3.9x

P/S Ratio

Is MMP overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MMP income statement (TTM)
Revenue	US$2.78b
Cost of Revenue	US$1.42b
Gross Profit	US$1.36b
Other Expenses	US$476.00m
Earnings	US$881.60m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	4.17
Gross Margin	48.89%
Net Profit Margin	31.75%
Debt/Equity Ratio	295.0%

How did MMP perform over the long term?

See historical performance and comparison

Dividends

8.2%

Current Dividend Yield

102%

Payout Ratio

Valuation

Is Magellan Midstream Partners undervalued compared to its fair value and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

28.1%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: MMP ($50.57) is trading below our estimate of fair value ($70.32)

Significantly Below Fair Value: MMP is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: MMP is good value based on its PE Ratio (12.1x) compared to the US Oil and Gas industry average (13.6x).

PE vs Market: MMP is good value based on its PE Ratio (12.1x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: MMP is poor value based on its PEG Ratio (1.9x)

Price to Book Ratio

PB vs Industry: MMP is overvalued based on its PB Ratio (5.9x) compared to the US Oil and Gas industry average (2.1x).

Future Growth

How is Magellan Midstream Partners forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MMP's forecast earnings growth (6.3% per year) is above the savings rate (1.9%).

Earnings vs Market: MMP's earnings (6.3% per year) are forecast to grow slower than the US market (12.5% per year).

High Growth Earnings: MMP's earnings are forecast to grow, but not significantly.

Revenue vs Market: MMP's revenue (7.9% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: MMP's revenue (7.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: MMP's Return on Equity is forecast to be very high in 3 years time (59.3%).

Past Performance

How has Magellan Midstream Partners performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-1.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MMP has high quality earnings.

Growing Profit Margin: MMP's current net profit margins (31.7%) are lower than last year (32.9%).

Past Earnings Growth Analysis

Earnings Trend: MMP's earnings have declined by 1.6% per year over the past 5 years.

Accelerating Growth: MMP's earnings growth over the past year (21.6%) exceeds its 5-year average (-1.6% per year).

Earnings vs Industry: MMP earnings growth over the past year (21.6%) underperformed the Oil and Gas industry 86.4%.

Return on Equity

High ROE: Whilst MMP's Return on Equity (48.9%) is outstanding, this metric is skewed due to their high level of debt.

Financial Health

How is Magellan Midstream Partners's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: MMP's short term assets ($951.2M) exceed its short term liabilities ($635.8M).

Long Term Liabilities: MMP's short term assets ($951.2M) do not cover its long term liabilities ($5.7B).

Debt to Equity History and Analysis

Debt Level: MMP's net debt to equity ratio (294.7%) is considered high.

Reducing Debt: MMP's debt to equity ratio has increased from 198.6% to 295% over the past 5 years.

Debt Coverage: MMP's debt is well covered by operating cash flow (22.5%).

Interest Coverage: MMP's interest payments on its debt are well covered by EBIT (4x coverage).

Balance Sheet

Dividend

What is Magellan Midstream Partners's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

8.21%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MMP's dividend (8.21%) is higher than the bottom 25% of dividend payers in the US market (1.54%).

High Dividend: MMP's dividend (8.21%) is in the top 25% of dividend payers in the US market (4.06%)

Stability and Growth of Payments

Stable Dividend: MMP's dividends per share have been stable in the past 10 years.

Growing Dividend: MMP's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (101.9%), MMP's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (83.8%), MMP's dividend payments are covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Energy industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

5.5yrs

Average management tenure

CEO

Aaron Milford (47 yo)

no data

Tenure

US$3,609,012

Compensation

Mr. Aaron L. Milford serves as President & Chief Executive Officer and Director of Magellan GP, LLC, at Magellan Midstream Partners, L.P. since May 01, 2022 and serves as General Partner of Magellan Midstr...

CEO Compensation Analysis

Compensation vs Market: Aaron's total compensation ($USD3.61M) is below average for companies of similar size in the US market ($USD13.27M).

Compensation vs Earnings: Aaron's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: MMP's management team is seasoned and experienced (5.5 years average tenure).

Board Members

Experienced Board: MMP's board of directors are considered experienced (7.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: MMP insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/17 00:00
End of Day Share Price	2022/05/17 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31