The benchmark indexes have experienced a freefall since the beginning of 2022 due to the Fed’s aggressive monetary policy hikes to curb soaring inflation, geopolitical conflicts between Russia and Ukraine, and major supply chain bottlenecks. Moreover, these macro issues are raising widespread recession possibilities for 2023.
“There is a slowdown happening, there’s no question about it. We are expecting a fairly weak economy throughout the entire year,” said Wells Fargo CEO Charlie Scharf.
Moreover, a hotter than expected November jobs data could prompt the Fed to raise interest rates further. The nonfarm payrolls increased by 263,000 in November, against Dow’s estimates of 200,000.
While the stock market volatility might remain, investors could buy dividend-paying stocks Global Partners LP (GLP) and MPLX L.P. (MPLX) to ensure a stable income stream.
Global Partners LP (GLP)
GLP, an energy company, purchases, sell, gathers, blends, stores, and manages the logistics of transporting gasoline and gasoline blend stocks, distillates, residual oil, renewable fuels, crude oil, and propane to wholesalers, retailers, and commercial customers in the New England states, Mid-Atlantic region, and New York.
On October 25, GLP declared a quarterly cash distribution of $0.63 per share, payable on November 14, 2022. Its annual dividend of $2.50 yields 8.18% on prevailing prices. The company’s dividend payouts have increased at a 5.6% CAGR over the past three years and a 5.4% CAGR over the past five years.
GLP’s sales increased 39.2% year-over-year to $4.63 billion for the fiscal third quarter ended September 30, 2022. Its gross profit grew 61.7% from the year-ago value to $328.38 million, while its operating income rose 163.2% year-over-year to $141.31 million. Moreover, the company’s EPS increased 262.8% year-over-year to $3.12 in the same quarter.
Analysts expect GLP’s EPS to increase 654.2% year-over-year to $9.88 in the current fiscal year ending December 2022. Its revenue is likely to rise 43.1% year-over-year to $18.96 billion. It surpassed the consensus EPS estimates in three of the trailing four quarters, which is impressive.
The stock has gained 30.1% year-to-date to close the last trading session at $30.56. It has gained 32.3% over the past year.
GLP’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Value and Momentum and a B for Growth and Sentiment. Within the A-rated MLPs – Oil & Gas industry, it is ranked first among 31 stocks.
Click here to see the other ratings of GLP for Stability and Quality.
MPLX L.P. (MPLX)
MPLX, a subsidiary of Marathon Petroleum Corporation, owns and operates midstream energy infrastructure and logistics assets primarily in the United States. It operates in two segments–Logistics and Storage; and Gathering and Processing.
On November 1, MPLX’s BOD declared a quarterly cash distribution of $0.78 per common unit for the third quarter of 2022, representing a 10% sequential increase.
Additionally, the company has been paying dividends for nine consecutive years. Its dividend payouts have grown at a 5.5% CAGR over the past five years. Its current dividend translates to a 9.76% yield, while its four-year average yield is 11.23%.
MPLX’s total revenues and other income increased 32.9% year-over-year to $3.40 billion for the fiscal third quarter of 2022. Its net income came in at $1.43 billion, up 78.1% year-over-year. Furthermore, its adjusted EBITDA and EPS came in at $1.47 billion and $1.36, up 6% and 83.8%, respectively, year-over-year.
For the fiscal year 2022, Street expects MPLX’s revenue to be $11.55 billion, representing a 15.2% year-over-year rise. The company’s EPS is expected to increase by 28.7% to $3.72 for the same period. The company beat EPS estimates in three of the trailing four quarters.
Over the past year, the stock has gained 7.4% to close the last trading session at $31.75.
It is no surprise that MPLX has an overall A rating, which equates to a Strong Buy in our POWR Ratings system.
The stock also has an A grade for Momentum and Quality and a B for Sentiment. Within the same industry, MPLX is ranked #4.
Click here to access the additional POWR Ratings for Growth, Value, and Stability for MPLX.
GLP shares were trading at $32.45 per share on Friday afternoon, up $1.89 (+6.18%). Year-to-date, GLP has gained 50.47%, versus a -15.38% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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