Dividends4Life: 12% Yield, 1.5X Coverage

12% Yield, 1.5X Coverage

Posted by D4L | Friday, September 18, 2020 | | 0 comments »

Like most other brick and mortar operators, this company's revenues were impacted by the pandemic in Q1-2 2020. Motor Fuel sales fell 35%, and non-motor fuel sales fell 15.5%, while Lease income was steady. This stock yields 12.86%. Management has maintained an $.8255 quarterly distribution since Q3 2016. Trailing distribution coverage is 1.55X, up from 1.17X for for the four previous quarters.

Sunoco LP (SUN) is the largest fuel distributor in the US. It operates through two segments, Fuel Distribution and Marketing, and All Other. The Fuel Distribution and Marketing segment purchases motor fuel from independent refiners and major oil companies and supplies it to independently-operated dealer stations, distributors and other consumer of motor fuel, and partnership operated stations, as well as to commission agent locations. Although SUN does earn lease income, the lion's share of its revenue comes from fuel sales, with non-motor fuel sales roughly 2x the amount of its lease income.

Source: Seeking Alpha

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