MPLX Expands Vertical Integration With New Growth Projects

We like MPLX's portfolio of refining and Appalachia-based gathering and processing assets, given the propensity for fee-for-capacity and minimum volume commitment contracts, which present a highly secure stream of income over the long run. With the highly secure cash flows, management has taken a smart approach to capital allocation. It initially prioritized unit buybacks, as repurchases between 2020 and 2022 totaled over $1 billion, but shifted to boosting the distribution in 2023. 2024 saw a healthy distribution increase but also buybacks. We think there is potential for further distribution increases through 2025.