Philadephia-based Sunoco Logistics (NYSE:SXL) has been in the news lately, as pipeline company Energy Transfer Partners (NYSE:ETP) bought out Sunoco’s (NYSE:SUN) refining business and took a 32.4% stake in SXL.
What’s left is a company that maintains a portfolio of complementary pipeline, terminal, acquisition and marketing assets used to facilitate sales of crude oil and refined products. The model is a fee-based system, as SXL charges tariffs for transporting refined products, crude oil and other hydrocarbons, and collects fees for providing storage services. SXL also purchases crude oil and resells it to SUN and other customers.
Revenues have been climbing since 2009 and stand at just under $11 billion through 2011, with net income more than $300 million over the last two years. As a holdover of the parent company, SXL has been paying dividends since 2002, with the latest coming in at $1.88 per year, a very solid 4.44% dividend yield. That’s a fairly hefty 63% dividend payout ratio, but with cash flow coming in at nearly $500 million, it should be safe for investors.