- Novembre 16, 2022
- Posted by: Oliver
- Categoria: Economics, Finance & accounting
The first dividend stock we’ll look at is a stand-by of the energy industry. Global Partners operates as an energy wholesaler, with a wide ranging network of energy delivery infrastructure, including oil and gas terminals, retail locations, and gas stations, located mainly in the Northeast but extending to the Midwest, Southeast, and Gulf states. The company’s deliverable products include crude oil, diesel oil, heating oil, kerosene, and gasoline. In addition to hydrocarbon fuels, Global Partners also markets numerous brands of pre-packaged to-go foods through convenience stores.
By the numbers, Global Partners has an impressive network. The company owns and operates 24 petroleum bulk product terminals, and has 10 million barrels worth of storage capacity. The company sells more than 369,000 barrels of fuel products daily, and owns, leases, or supplies approximately 1,700 gas stations.
Rising prices recently have bumped up Global Partners’ top line, and the company’s 9-month revenue for 2022, at $14.45 billion, already exceeds the $13.24 billion revenue from the whole of 2021. The company’s 3Q22 sales came in at $4.6 billion, up 39% year-over-year. Net income rose sharply from 3Q21, to $111.4 million from $33.6 million, an impressive increase of 231%. Per share, the gain was even stronger; diluted EPS rose 262% y/y, from 86 cents to $3.12. The company has raised its quarterly dividend payment 8 times in the last three years.
Global Partners’ last dividend payment was made on November 14 this year, at 62.5 cents per common share. This annualizes to $2.50 per share and gives an 8.15% yield. With the recent dip in the annualized rate of inflation to 7.7% for October, this means investors will realize a real rate of return from GLP’s dividend payment.
Global Partners’ solid position and performance caught the attention of Stifel analyst Selman Akyol, who saw fit to upgrade the stock from Hold to Buy.
Backing his bullish stance, Akyol writes, “We expect Global to use recent outperformance to expand its footprint and benefit from increased volumes and scale advantages. There may be headwinds in 2023 depending on how the commodity picture evolves but we would highlight GLP has been able to deliver exceptional performance this year amidst elevated commodity volatility. While we recognize 2022 results may not be repeated in 2023, GLP was able to use its elevated cash flows to invest in lower risk business lines, deleverage the balance sheet and increase the distribution. We believe these decisions are accretive to unit holders in the short and long term.”
Looking forward from these comments, Akyol set a price target of $35 on the stock, suggesting room for an upside of 12.5% in the year ahead. Based on the current dividend yield and the expected price appreciation, the stock has ~21% potential total return profile.
Some stocks slip under the radar, picking up few analyst reviews despite sound performance, and this is one. Akyol’s is the only recent analyst review on record here.
