BRENTWOOD, Tenn.—Soreq Avigal, President of Delek Logistics Partners, LP (NYSE:DKL), recently acquired 2,563 common units of the company. The purchase, valued at approximately $99,957, was made at a price of $39 per unit. This transaction was part of a direct participation in an underwritten offering by the issuer.
Following this acquisition, Avigal's total holdings stand at 46,758 common units. This move reflects a significant investment by the executive, indicating confidence in the company's future prospects.
In other recent news, Delek Logistics Partners reported record second-quarter earnings with an adjusted EBITDA of $102.4 million, marking a significant milestone for the company. In a strategic move to strengthen its market position, Delek Logistics has extended its contract with DK, invested in a new gas processing plant, and acquired H2O Midstream. As a result of these strategic transactions, the Board of Directors approved an increase in the quarterly distribution to $1.09 per unit.
Citi, a well-established financial firm, has upgraded its rating on Delek Logistics from Neutral to Buy, largely due to the company's improved outlook and high yield potential. The firm also raised the price target to $45, reflecting positive expectations for the company's performance.
In the fourth quarter of 2024, Delek Logistics is expected to see a significant improvement as it fully accounts for its acquisition of H2O Midstream. This recent development, combined with a new acreage dedication in the Midland region, is anticipated to bring further details about minimum volume commitments and future expectations.
Finally, the company's leverage has improved, with a ratio of 3.81 times at the end of the quarter, down from 4.84 at the end of 2022. Looking ahead, the majority of Delek Logistics' EBITDA is projected to come from non-related parties by the first half of 2025, solidifying its position as a mostly independent midstream company.
InvestingPro Insights
Soreq Avigal's recent acquisition of Delek Logistics Partners (NYSE:DKL) units aligns with several key metrics and trends highlighted by InvestingPro. The company's stock is currently trading near its 52-week low, which may have presented an attractive entry point for the executive. This timing is particularly interesting given that DKL has a high shareholder yield and pays a significant dividend to shareholders.
According to InvestingPro data, DKL's dividend yield stands at an impressive 11.08%, with the company having raised its dividend for 11 consecutive years. This consistent dividend growth, coupled with the stock's recent dip, could explain Avigal's decision to increase his stake.
Moreover, DKL's P/E ratio of 13.39 suggests the stock may be undervalued relative to its earnings, potentially offering upside potential. The company's profitability over the last twelve months and analysts' predictions of continued profitability this year further support the executive's investment decision.
InvestingPro Tips also indicate that DKL has maintained dividend payments for 12 consecutive years, demonstrating a strong commitment to shareholder returns. This track record of consistent payouts aligns with Avigal's increased position in the company.
For investors seeking more comprehensive insights, InvestingPro offers additional tips and analysis on Delek Logistics Partners. In fact, there are 11 more InvestingPro Tips available for DKL, providing a deeper understanding of the company's financial health and market position.
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