Sunoco-NuStar Transformation Will Fuel Growth And Secure Dividend

Summary

• Sunoco LP's acquisition of NuStar Energy creates a vertically integrated oil and gas giant with a market cap of $7.36 billion and extensive pipeline and terminal assets.
• The Q2 2024 earnings report shows successful initial integration, with adjusted EPS of $1.48 and total revenue of $6.17 billion, beating analyst expectations.
• Despite increased debt from the acquisition, Sunoco's strong top-line performance and distributable cash flow support a healthy dividend yield of 6.56%.
• S&P and other credit agencies upgraded SUN's ratings, expecting EBITDA expansion and deleveraging to about 4x by fiscal 2026, justifying a Buy rating.