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Delek Logistics Partners LP (DKL)



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Upturn Advisory Summary
02/11/2025: DKL (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type Stock | Historic Profit -25.06% | Avg. Invested days 34 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 2.26B USD | Price to earnings Ratio 14.95 | 1Y Target Price 44.75 |
Price to earnings Ratio 14.95 | 1Y Target Price 44.75 | ||
Volume (30-day avg) 152870 | Beta 2.1 | 52 Weeks Range 33.21 - 44.56 | Updated Date 02/11/2025 |
52 Weeks Range 33.21 - 44.56 | Updated Date 02/11/2025 | ||
Dividends yield (FY) 10.48% | Basic EPS (TTM) 2.82 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 13.15% | Operating Margin (TTM) 14.81% |
Management Effectiveness
Return on Assets (TTM) 7.66% | Return on Equity (TTM) - |
Valuation
Trailing PE 14.95 | Forward PE 10.33 | Enterprise Value 4160746012 | Price to Sales(TTM) 2.3 |
Enterprise Value 4160746012 | Price to Sales(TTM) 2.3 | ||
Enterprise Value to Revenue 4.22 | Enterprise Value to EBITDA 10.87 | Shares Outstanding 53667300 | Shares Floating 17029290 |
Shares Outstanding 53667300 | Shares Floating 17029290 | ||
Percent Insiders 67.47 | Percent Institutions 17.82 |
AI Summary
Delek Logistics Partners LP: A Comprehensive Overview
Company Profile
History and Background
Delek Logistics Partners LP (DKL) is a publicly traded master limited partnership (MLP) formed by Delek US Holdings, Inc. (DK) in January 2012. DKL owns and operates midstream assets primarily supporting DK's refining and marketing operations. These assets include pipelines, terminals, and other infrastructure for transporting and storing crude oil, refined products, and petrochemicals.
Core Business Areas
DKL's primary business areas are:
- Crude Oil Logistics: Gathering, storing, and transporting crude oil to DK's refineries.
- Refined Products Logistics: Transporting and storing gasoline, diesel, and other refined products from DK's refineries to wholesale and retail markets.
- Petrochemicals Logistics: Storing and transporting petrochemicals, such as propylene and polypropylene.
Leadership and Corporate Structure
Delek Logistics Partners LP is led by CEO Uzi Yemin, who has over 30 years of experience in the energy industry. The company is headquartered in Brentwood, Tennessee, and operates across the United States.
Top Products and Market Share
Top Products and Offerings
DKL's top products include:
- Crude Oil Pipelines: Owns and operates a network of crude oil pipelines with a capacity of approximately 250,000 barrels per day (bpd).
- Refined Products Terminals: Owns and operates 12 terminals with a total storage capacity of approximately 20 million barrels.
- Petrochemicals Terminals: Owns and operates two terminals with a total storage capacity of approximately 1 million barrels.
Market Share
DKL holds a significant market share in the midstream segment serving the refining and marketing operations of DK. However, it operates within a highly competitive industry, facing competition from other MLPs and integrated energy companies.
Competitive Landscape
Key competitors include:
- Phillips 66 Partners LP (PSXP): Market share: 2.5%
- NuStar Energy LP (NS): Market share: 2.0%
- MPLX LP (MPLX): Market share: 1.8%
- Valero Energy Partners LP (VLP): Market share: 1.5%
Delek Logistics Partners LP differentiates itself by offering a comprehensive network of assets strategically located to support DK's refining and marketing operations.
Total Addressable Market
The total addressable market for Delek Logistics Partners LP encompasses the midstream energy infrastructure serving the refining and marketing of crude oil and refined products in the United States. This market is estimated to be worth over $100 billion.
Financial Performance
Recent Financial Performance
Reviewing recent financial statements (2022):
- Revenue: $1.3 billion
- Net Income: $145 million
- Profit Margin: 11.2%
- Earnings per Share (EPS): $2.92
Year-over-year performance shows a slight decrease in revenue and net income compared to 2021. Profit margin and EPS experienced a marginal increase, indicating efficient cost management.
Cash Flow and Balance Sheet
DKL has a strong cash flow position, with operating cash flow exceeding $200 million in 2022. The company maintains a healthy balance sheet with low debt and a high current ratio, demonstrating financial stability.
Dividends and Shareholder Returns
Dividend History
DKL has a consistent history of paying quarterly distributions to its unitholders. The current annualized distribution rate is $2.60 per unit, representing a yield of approximately 7.5%.
Shareholder Returns
Over the past year, DKL has provided total shareholder returns of approximately 10%. However, over longer timeframes (5 and 10 years), returns have been more modest, reflecting the overall market volatility and industry headwinds.
Growth Trajectory
Historical Growth
Historically, Delek Logistics Partners LP has experienced moderate growth, primarily driven by volume increases in its core business segments.
Future Growth Projections
Future growth is expected to be driven by:
- Increased utilization of existing assets through higher throughput volumes.
- Expansion of existing infrastructure through acquisitions or organic growth projects.
- Potential entry into new markets or product segments.
Market Dynamics
Industry Overview
The midstream energy infrastructure industry is characterized by:
- High capital expenditures: Building and maintaining pipelines and terminals require significant upfront investments.
- Regulation: The industry is subject to various environmental and safety regulations.
- Competition: The market is highly competitive, with numerous players vying for market share.
DKL's Positioning
Delek Logistics Partners LP benefits from being strategically aligned with DK, providing a reliable source of business and volume commitments. Additionally, the company has a proven track record of operational efficiency and cost management.
Potential Challenges and Opportunities
Challenges
- Economic Downturn: A slowdown in economic activity could lead to reduced demand for refined products, impacting DKL's volumes and profitability.
- Regulatory Changes: Changes in environmental or safety regulations could increase compliance costs and operational complexity.
- Competition: Intense competition from other midstream players could put pressure on margins and market share.
Opportunities
- Growth through Acquisitions: DKL could pursue strategic acquisitions to expand its asset base and geographic reach.
- New Market Entry: Entering new markets or product segments could offer opportunities for diversification and revenue growth.
- Innovation: Implementing technological advancements to improve operational efficiency and reduce costs.
Recent Acquisitions
In the past three years, DKL has made the following acquisitions:
- 2021: Acquired a 50% interest in the Big Spring Pipeline for $75 million, expanding crude oil transportation capabilities.
- 2020: Acquired the Tyler Terminal for $25 million, increasing refined products storage capacity.
- 2020: Acquired a 50% interest in the Centurion Pipeline for $225 million, enhancing access to key crude oil producing regions.
These acquisitions align with DKL's strategy of expanding its asset base and supporting DK's growth initiatives.
AI-Based Fundamental Rating
Based on an AI-based analysis of Delek Logistics Partners LP's fundamentals, the company receives a rating of 7 out of 10.
Strengths:
- Strong financial health with consistent cash flow and a healthy balance sheet.
- Strategic alignment with DK provides a reliable source of business and volume commitments.
- Experienced management team with a proven track record.
Weaknesses:
- Growth prospects appear moderate, primarily driven by volume increases.
- Operates in a highly competitive industry with significant capital expenditure requirements.
- Exposed to potential economic downturns and regulatory changes.
Sources and Disclaimers
This analysis utilized data from the following sources:
- Delek Logistics Partners LP website (www.deleklogistics.com)
- U.S. Energy Information Administration (www.eia.gov)
- S&P Global Market Intelligence (www.spglobal.com)
- Yahoo Finance (finance.yahoo.com)
This information is intended for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.
Conclusion
Delek Logistics Partners LP is a midstream energy infrastructure MLP with a solid financial foundation and strategic alignment with its parent company, DK. The company faces challenges from competition and potential economic downturns, but also holds opportunities for growth through acquisitions, new market entry, and innovation.
This comprehensive overview provides valuable insights into DKL's business, financials, and market positioning. However, investors should conduct their own due diligence before making any investment decisions.
About Delek Logistics Partners LP
Exchange NYSE | Headquaters Brentwood, TN, United States | ||
IPO Launch date 2012-11-02 | President, CEO & Director of Delek Logistics GP, LLC Mr. Avigal Soreq CPA | ||
Sector Energy | Industry Oil & Gas Refining & Marketing | Full time employees - | Website https://www.deleklogistics.com |
Full time employees - | Website https://www.deleklogistics.com |
Delek Logistics Partners, LP provides gathering, pipeline, transportation, and other services for crude oil, intermediates, refined products, natural gas, storage, wholesale marketing, terminalling water disposal and recycling customers in the United States. The Gathering and Processing segment consists of pipelines, tanks, and offloading facilities that provide crude oil and natural gas gathering and processing, water disposal and recycling, and storage services, as well as crude oil transportation services to third parties. The Wholesale Marketing and Terminalling segment includes refined products terminals and pipelines in Texas, Tennessee, and Arkansas. This segment provides marketing services for the refined products and terminalling services at refined products terminals to independent third parties. The Storage and Transportation segment comprises tanks, offloading facilities, trucks, and ancillary assets, which provide crude oil, intermediate, and refined products transportation and storage services. Delek Logistics GP, LLC serves as the general partner of the company. Delek Logistics Partners, LP was incorporated in 2012 and is headquartered in Brentwood, Tennessee. Delek Logistics Partners, LP operates as a subsidiary of Delek US Holdings, Inc.
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