Global Partners LP Preferreds Offer 12% Yield – Is It Worth The Risk?
December 14, 2023
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Investing in Global ($NYSE:GLP) Partners LP (GPL) preferred shares is a difficult decision for many investors. On one hand, they offer a 12% yield—much higher than the market average—but on the other hand, there is the risk that the investment may not return what was expected. For investors looking for income, the yield makes GPL shares an attractive option, but it is important to understand the risks associated with such a high-yield investment before making the decision to purchase. The company operates many different types of businesses, including convenience stores, fuel distribution, and logistics. GPL’s preferred shares are well-established and provide investors with a unique opportunity for diversification and income. In order to determine if investing in GPL preferred shares is worth the risk, investors should consider their own risk tolerance as well as evaluate the company’s financial health.
GPL’s financials are generally strong and the company has significant cash reserves. Overall, investors should consider investing in GPL preferred shares if they are willing to take on the risk associated with a high yield investment. Although the potential to earn up to 12% is attractive, it is important to do extensive research into the company’s financials before investing. By doing so, investors can make sure that they are comfortable with their decision and that their investment will be worth the risk.
Analysis
GoodWhale conducted an analysis of GLOBAL PARTNERS LP’s wellbeing and found that the company has a high health score of 8/10 with regard to its cashflows and debt. This suggests that the company is capable to sustain future operations in times of crisis. GLOBAL PARTNERS LP was classified as a ‘rhino’ company, meaning it achieved moderate revenue or earnings growth. Dividend strength was high, while asset, growth, and profitability were all medium. Given this information, we believe that GLOBAL PARTNERS LP may be of interest to investors looking for a company with moderate growth potential and a strong dividend profile. More…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for GLP. More…
| Total Revenues | Net Income | Net Margin |
| 16.51k | 132.15 | 0.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for GLP. More…
| Operations | Investing | Financing |
| 246.12 | -163.3 | -87 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for GLP. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.05k | 2.28k | 22.8 |
Key Ratios Snapshot
Some of the financial key ratios for GLP are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 20.3% | 9.8% | 1.5% |
| FCF Margin | ROE | ROA |
| 0.9% | 19.6% | 5.0% |
Peers
Global Partners LP is one of the largest publicly traded partnerships and a leading independent owner, operator, and developer of midstream energy assets in North America. The company owns, controls, or has access to one of the largest terminal networks of refined petroleum products and renewable fuels in the Northeast. Global Partners competes with Martin Midstream Partners LP, YPF SA, and PBF Logistics LP.
– Martin Midstream Partners LP ($NASDAQ:MMLP)
Midstream Partners LP is a publicly traded partnership that owns, operates, and develops midstream assets in the United States. The company’s assets include crude oil and refined products pipelines, terminals, and storage facilities. Midstream Partners LP is headquartered in Houston, Texas.
– YPF SA ($NYSE:YPF)
YPF SA is an Argentine oil company with a market cap of 2.91B as of 2022. The company has a return on equity of 22.03%. YPF SA is engaged in the exploration, development, and production of oil and gas in Argentina. The company also produces and markets natural gas, electricity, and petrochemicals.
– PBF Logistics LP ($NYSE:PBFX)
PBF Logistics LP is a master limited partnership that owns, leases, operates and develops crude oil and refined petroleum products terminals, pipelines, storage tanks and trucks. As of December 31, 2020, the company’s assets included 27 terminals, six pipelines and two trucking fleets with a total capacity of approximately 33.5 million barrels.
PBF Logistics LP has a market cap of 1.33B as of December 31, 2020. The company’s Return on Equity for 2020 was 43.63%.
PBF Logistics LP is engaged in the business of owning, leasing, operating and developing crude oil and refined petroleum products terminals, pipelines, storage tanks and trucks. The company’s terminals are located in California, Louisiana, New Jersey, Ohio and Texas. The company’s pipelines transport crude oil and refined products in Ohio and Texas. The company’s trucking fleet delivers crude oil and refined products to customers in Ohio and Texas.
Summary
Global Partners LP is a midstream logistics and marketing company primarily engaged in the marketing, distribution, and management of fuels and petroleum products. The company offers investors a generous 12% yield, which is relatively high compared to the average yields of other investments. Despite the attractive yield, investors should be aware of the risk associated with this company’s business model. The main areas of risk include the company’s dependence on commodity prices, the potential for government regulation, and the cyclical nature of the business.
Additionally, investors should pay attention to management’s track record for successfully executing growth strategies and maintaining a healthy balance sheet. Investors must carefully analyze the potential risks and rewards before investing in Global Partners LP.
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