18 Straight Hikes, A 9% Yield, More Hikes Ahead For This YieldCo LP

The yield is 9.36%. Management has raised the distribution for 18 straight quarters. Management is targeting 10% annual distribution growth through 2019. Its parent company recently closed a big deal that will bring the company more drop-downs in the very active Permian Basin.

Delek Logistics Partners LP (DKL) is the "yieldco" arm of DK - its logistics assets exist mainly to serve DK's petroleum refining assets and transportation services. In this type of arrangement, the parent/sponsor sells/drops down assets to the yieldco LP, which in turn funds these acquisitions via a combination of equity and debt. The yieldco usually has an attractive distribution yield in order to garner support for its publicly traded units. Delek Logistics Partners LP owns and operates logistics and marketing assets for crude oil and intermediate and refined products in the United States. It operates in two segments, Pipelines and Transportation, and Wholesale Marketing and Terminalling.

Source: Seeking Alpha

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