Income-seekers have many more investment options now that interest rates are higher. One they won’t want to overlook is MPLX(MPLX 0.64%). The master limited partnership (MPL) currently yields 8.8%. The energy midstream company’s monster payout is on an extremely firm foundation.
That was evident in its recently reported second-quarter results. Here’s why MPLX is such an attractive option for income-seekers these days.
A cash flow machine
MPLX generated more than $1.3 billion in distributable cash flow during the second quarter and almost $2.6 billion through the first half of the year (6% higher than the year-ago level). That’s free cash the MLP can use as it sees fit, including distributing it to investors.
The company currently pays a fixed quarterly distribution of $0.775 per unit ($3.10 annualized), an 8.8% yield at the recent unit price. The MLP paid $799 million in distributions during the second quarter. It produced enough cash to cover that payout by a very comfortable 1.7 times.
That high coverage ratio enabled MPLX to retain substantial cash, which it used to finance expansion projects while maintaining a strong balance sheet. It invested $203 million into growth capital projects during the second quarter. Meanwhile, the remaining funds strengthened its already solid balance sheet.
MPLX ended the second quarter with a 3.5 times leverage ratio, well below its 4.0 times target. It also had significant liquidity, including $755 million in cash, $2 billion available on its bank credit facility, and $1.5 billion available through an intercompany loan with its parent, refining giant Marathon Petroleum.
As MPLX’s financial metrics clearly show, its distribution is on a very firm foundation. It produces more cash than it needs to cover that payout and its growth capital projects. That enabled it to strengthen what’s becoming a fortress-like balance sheet.
More growth is coming down the pipeline
MPLX continues to invest money to expand its energy midstream operations. It’s currently advancing several projects across its logistics & storage (L&S) and gathering & processing (G&P) platforms.
In its L&S segment, MPLX is working with its joint venture partners to expand the Whistler pipeline and its Agua Dulce Corpus Christi (ADCC) pipeline lateral to increase the flow of natural gas out of the Permian Basin. The company also recently agreed to expand its BANGL natural gas liquids pipeline, which should enter service by the first half of 2025.
Meanwhile, its G&P segment is building several new natural gas processing plants in the Permian and Marcellus basins. It recently agreed to construct the Secretariat processing plant in the Permian, its seventh in the region, which should come online in the second half of 2025.
These and other projects will supply MPLX with incremental cash flow when they come online over the next few years. That will give it the fuel to continue growing its distribution. MPLX has steadily increased its payout since Marathon Petroleum formed the company more than a decade ago:
MPLX Dividend data by YCharts. (NOTE: MPLX made a special distribution payment in 2021 of $0.5750 per unit.)
The MLP most recently increased its distribution by 10% last November. The payout will likely continue rising. Driving that view is the 6% growth in distributable cash flow over the past year and the pipeline of expansion projects it will complete over the next couple of years.
An income-producing machine
MPLX has treated income-seeking investors very well over the years. The MLP has steadily increased its distribution, which seems likely to continue. It backs its current payout with rock-solid financial metrics, enabling it to keep expanding its operations and distribution. These features make its 8.8%-yielding payout a very attractive option for those seeking to generate sustainable investment income these days.
Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
