Yields 7%, 51 Straight Hikes, With 8% Distribution Growth

Management has increased quarterly distributions 51 straight quarters. Current Yield is 7.16%. Distribution/unit has increased 7.68% over the past four quarters, in line with management's increased 8% growth target. Unlike some other management teams we've covered in the energy field, management appears to take a steadier approach. When asked about any other possible Permian expansion plans on the Q2 earnings call, they replied, "it's very competitive in the Permian. There's a lot of money chasing deals in the Permian. So we're not going to get carried away emotionally and do something in the Permian unless it makes sense. But we have a strong asset base to which to leverage and we'll take advantage of that where it makes sense."

When we last wrote an article about Holly Energy Partners LP (HEP) in May, it had just reported a rather rough Q1 '17 and had been dinged by the market down to $33.75. Currently at $35.34, it's up 4.7% since then, and has gained 8.57% in the past month, although it still trails the market over the past year and in 2017 so far. Last week, HEP's management declared a cash distribution of $0.6325 per unit for Q2 2017, an 8.1% increase compared to the $0.585/unit distribution declared for Q2 2016. Back in 2004, HEP started its distribution history with a $.2175 payout, and has never looked back, achieving a four-year distribution growth rate of 7.04%. It's also interesting that management is now, in the words of Chef Emeril, "taking it up a notch," and is targeting 8% distribution growth.

Source: Seeking Alpha

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