Shneur Gershuni, executive director in the Energy Group at UBS Investment Bank, says MPLX LP (MPLX) is one of his favorite MLP investment options this year. MPLX was created by its parent, Marathon Petroleum Corporation (MPC), and Gershuni says Marathon has a good deal of assets to sell to MPLX.
“So we’re expecting the growth rate to be in the high 20s on a go-forward basis,” Gershuni says. “We think that they may potentially sell and move more assets down into the MLP structure.”
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In addition to the attractive growth rate, Gershuni says he also likes MPLX’s relative valuation.
“What you’ll notice is it does have a relatively low yield, and that is because it reflects the fact that investors are expecting it to grow, and so it manifests in the lower yield because of the growth rate, because the expectation is going to be that much higher later on down the road,” he says.
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