Group 1 - Delek Logistics Partners, LP plans to issue a press release summarizing its fourth quarter 2025 results before the U.S. stock market opens on February 27, 2026 [1] - A conference call to discuss the fourth quarter results is scheduled for February 27, 2026, at 11:30 a.m. CT (12:30 p.m. ET) [1] - The live broadcast of the conference call will be available online, with a replay accessible for 90 days [2] Group 2 - Delek Logistics is a midstream energy master limited partnership based in Brentwood, Tennessee, focusing on gathering, pipeline, transportation, and other services in the energy sector [3] - The company operates primarily in the Permian Basin, Delaware Basin, and Gulf Coast region, providing services for crude oil, refined products, natural gas, and more [3] - Delek US Holdings, Inc. owns the general partner interest and a majority limited partner interest in Delek Logistics, also serving as a significant customer [4]

Core Insights - The S&P 500's dividend yield is currently at 1.1%, nearing an all-time low, leading to fewer stocks offering attractive income streams. However, companies like Delek Logistics Partners, Hess Midstream, and Plains All American Pipeline provide yields up to 9% and have recently increased their payouts [1]. Delek Logistics Partners - Delek Logistics Partners declared a quarterly distribution payment of $1.125 per unit, reflecting a 0.4% increase from the previous quarter, extending its distribution growth streak to 52 consecutive quarters and raising its yield to 9% [2]. - The company generated enough cash to cover its distribution payment by over 1.3 times last year, allowing for reinvestment in expansion projects and maintaining financial flexibility [3]. - Delek's market cap is $2.7 billion, with a gross margin of 22.31% and a dividend yield of 8.86%. Recent investments include the completion of the Libby 2 gas processing plant and the acquisition of Gravity Water [5]. Hess Midstream - Hess Midstream announced a quarterly cash distribution payment of $0.7641 per share, a 1.2% increase from the prior quarter, resulting in a yield of 8.2%. The company has increased its dividend by 65% since 2021 [6]. - The company has 100% fee-based minimum-volume contracts, providing stability in cash flow through 2028, and expects to increase its dividend by at least 5% annually during this period while generating about $1 billion in excess free cash flow [9]. - Hess Midstream's market cap is $4.7 billion, with a gross margin of 63.94% and a dividend yield of 8.07% [7]. Plains All American Pipeline - Plains All American Pipeline announced a quarterly distribution payment of $0.4175 per unit, a 10% increase from the previous level, resulting in a yield of 8.5%. The company has grown its payout at a 21% compound annual rate over the last four years [10]. - The company is selling its Canadian natural gas liquids business for $3.8 billion, which will enhance its financial position and allow for reinvestment into its oil pipeline operations [12]. - Plains has the financial flexibility to invest in organic expansion projects and acquisitions, which will help grow its cash flow and continue increasing its high-yielding distribution [13]. Investment Opportunities - The energy midstream sector, represented by Delek Logistics Partners, Hess Midstream, and Plains All American Pipeline, offers attractive passive income investment opportunities with yields between 8% and 9%, and all three companies have a history of regularly raising their payments [14].

Core Insights - The midstream sector is demonstrating strong financial health at the start of 2026, with numerous companies announcing increases in distributions and dividends, reinforcing its position as a reliable income source for investors [1] Payout Growth Across Midstream - Williams (WMB) raised its quarterly cash dividend to $0.525 from $0.50, a 5% increase [1] - Plains All American (PAA/PAGP) increased its quarterly distribution to $0.4175 per unit, reflecting a 9.9% rise [1] - Enterprise Products Partners (EPD) raised its distribution to $0.55, nearly a 1% increase [1] - ONEOK (OKE) announced a 4% sequential increase to $1.07 per share [1] Broad Sector Momentum - Energy Transfer (ET) increased its quarterly distribution to $0.335, a 3.1% year-over-year rise from $0.325 [1] - Hess Midstream (HESM) raised its payout to $0.7641, marking a 9.0% year-over-year increase [1] - Sunoco LP (SUN) announced a distribution of $0.9317, a 5.1% year-over-year increase [1] - Genesis Energy (GEL) raised its distribution by $0.015 to $0.18 per unit, a 9.1% increase [1] - Kinetik (KNTK) raised its payout to $0.81, reflecting a 4% sequential increase [1] - Delek Logistics (DKL) increased its payout to $1.125, representing a 1.85% year-over-year rise [1] ETF Exposure - Energy Transfer, Enterprise, Hess Midstream, Genesis, Delek Logistics, Sunoco, and Plains are included in both the Alerian MLP ETF (AMLP) and the Alerian Energy Infrastructure ETF (ENFR) [1] - AMLP tracks the Alerian MLP Infrastructure Index (AMZI), while ENFR tracks the Alerian Midstream Energy Select Index (AMEI) [1] - Williams, ONEOK, and Kinetik operate as C-corps, with only ENFR holding them [1]

Core Viewpoint - Delek Logistics Partners, LP has declared a quarterly cash distribution of $1.125 per common limited partner unit for the fourth quarter of 2025, indicating a strong financial performance and commitment to returning value to unitholders [1]. Financial Summary - The annualized cash distribution amounts to $4.50 per common limited partner unit, reflecting a stable income stream for investors [1]. - The cash distribution is scheduled to be payable on February 12, 2026, to unitholders of record as of February 5, 2026, ensuring timely returns for investors [1]. Company Overview - Delek Logistics Partners, LP operates as a midstream energy master limited partnership, positioning itself within the energy sector to capitalize on logistics and transportation opportunities [1].

Company Overview - Delek Logistics Partners (DKL) is a midstream master limited partnership primarily operating in Texas and surrounding states, known for its long history of growth [1] Investment Strategy - The focus is on generating a 7%+ income yield by investing in a portfolio of energy stocks while minimizing the risk of principal loss [1] - The investment group, Energy Profits in Dividends, targets both traditional and renewable energy companies that hold a competitive advantage and pay strong dividends [1] Research and Analysis - The leader of the investment group provides in-depth micro and macro-analysis of both domestic and international energy companies [1] - Subscribers gain access to exclusive research and investment ideas that are not available to the general public [1]

Core Insights - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, highlighting its growth potential and diversification opportunities [1] - The popularity of insurance companies in the Philippines since 2014 indicates a shift in investment strategies among local investors, moving towards a more diversified portfolio [1] - The entry into the US market in 2020 reflects a growing interest in international investments, particularly in sectors like banking, hotels, and logistics [1] Investment Strategies - Initial investments were focused on blue-chip companies, showcasing a conservative approach to stock investing [1] - The diversification into various industries and market cap sizes demonstrates a strategic shift towards balancing risk and return [1] - The decision to write for Seeking Alpha indicates a commitment to knowledge sharing and continuous learning in investment practices [1] Market Trends - The ASEAN market remains a focal point for investments in banking, telecommunications, and retail sectors, suggesting robust growth in these areas [1] - The US market has become increasingly attractive for investments in banks, hotels, shipping, and logistics companies, reflecting a trend towards global investment strategies [1] - The use of comparative analyses between the US and Philippine markets highlights the importance of market research in making informed investment decisions [1]

Core Insights - The S&P 500's dividend yield is at a historic low of approximately 1.2%, while several stocks offer significantly higher yields, including those in the double digits [1] AGNC Investment - AGNC Investment currently yields 13.6%, over 10 times higher than the S&P 500 [3] - The REIT invests in residential mortgage-backed securities (MBS) guaranteed against credit losses by government agencies, generating low-risk, fixed-income returns [3] - AGNC's return on equity is in the mid-to-high teens, aligning with its cost of capital, allowing it to maintain its monthly dividend since early 2020 [4] Delek Logistics Partners - Delek Logistics Partners has a current yield of 10.1% and operates as a master limited partnership (MLP) with a portfolio of energy midstream assets [6] - The MLP expects to generate cash flow sufficient to cover its dividend payout by 1.3 times this year, providing a cushion for operational investments [8] - Delek Logistics has increased its distribution for 51 consecutive quarters, indicating strong financial flexibility for future growth [9] Ares Capital Corporation - Ares Capital Corporation offers a dividend yield of 9.6% and invests in private companies through debt and equity [10] - The company has maintained a stable or increasing dividend rate for over 16 years, with a cumulative net realized loss of 0% since inception [12] - Ares Capital raised over $1 billion in fresh capital in Q3, enabling new investments and supporting its dividend payments [13] Summary of High-Yield Stocks - AGNC Investment, Delek Logistics Partners, and Ares Capital Corporation provide substantial yields and have solid records of maintaining or increasing their dividends, appealing to risk-tolerant investors seeking income [14]

Group 1 - Investors in Delek Logistics Partners, LP (DKL) should monitor the stock due to significant activity in the options market, particularly the Nov. 21, 2025 $30 Put, which has high implied volatility [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in Delek Logistics shares, possibly due to an upcoming event [2] - Delek Logistics currently holds a Zacks Rank 3 (Hold) in the Oil and Gas - Production Pipeline - MLB industry, which is in the bottom 22% of the Zacks Industry Rank [3] Group 2 - Over the past 60 days, no analysts have increased earnings estimates for Delek Logistics for the current quarter, while one analyst has lowered their estimate, resulting in a decrease in the Zacks Consensus Estimate from $1.15 to $1.06 per share [3] - The high implied volatility may indicate a trading opportunity, as options traders often seek to sell premium on options with high implied volatility, hoping the underlying stock does not move as much as expected at expiration [4]

Financial Performance - Total net revenues for Q3 2025 reached $261.3 million, a 21.9% increase from $214.1 million in Q3 2024[16] - Operating income for Q3 2025 was $45.4 million, compared to $31.8 million in Q3 2024, reflecting a 42.6% increase[16] - Net income for the nine months ended September 30, 2025, was $129.2 million, up from $107.4 million for the same period in 2024, representing a 20.3% increase[16] - The company reported a basic net income per unit of $0.85 for Q3 2025, compared to $0.71 for Q3 2024, marking a 19.7% increase[16] - Net income for the three months ended September 30, 2025, was $46.3 million, up 37.4% from $33.7 million in the prior year[46] - Net income for the three months ended September 30, 2025, was $45,560 thousand, compared to $33,674 thousand in 2024, reflecting a year-over-year increase of 35.3%[79] - The company reported a net income of $45.6 million for Q3 2025, compared to $33.7 million in Q3 2024, representing a 35.4% increase[180] Assets and Liabilities - Total current assets increased to $382.8 million as of September 30, 2025, compared to $145.9 million at December 31, 2024[14] - Long-term debt, net of current portion, rose to $2.3 billion as of September 30, 2025, up from $1.9 billion at December 31, 2024[14] - Total assets as of September 30, 2025, were $2.75 billion, an increase from $2.04 billion at December 31, 2024[14] - The company’s total liabilities increased to $2.73 billion as of September 30, 2025, compared to $2.01 billion at December 31, 2024[14] - The principal amount of long-term debt as of September 30, 2025, was $2,306,850 thousand, compared to $1,885,400 thousand at the end of 2024, reflecting an increase of 22.3%[80] Cash Flow and Investments - Net cash provided by operating activities increased to $193.9 million for the nine months ended September 30, 2025, compared to $156.4 million in 2024, reflecting a growth of 24%[21] - The company reported a net cash used in investing activities of $411.7 million for the nine months ended September 30, 2025, compared to $314.5 million in 2024, representing a 31% increase[21] - Cash paid for interest during the nine months ended September 30, 2025, was $129.3 million, up from $95.3 million in 2024, indicating a 35.7% increase[22] - The company reported a net increase in cash and cash equivalents of $1.5 million for the nine months ended September 30, 2025, compared to an increase of $3.6 million in 2024[21] Acquisitions - The Gravity Acquisition completed on January 2, 2025, had a preliminary purchase price of $300.8 million, which included $209.3 million in cash and 2,175,209 common units[33] - Revenue from the Gravity Acquisition operations was $67.5 million for the period from January 2, 2025, through September 30, 2025, with a net income contribution of $24.0 million[35] - The H2O Midstream Acquisition was completed for a total consideration of $229.7 million, consisting of $159.7 million in cash and $70.0 million in preferred units[47] - The preliminary fair value of total assets acquired in the H2O Midstream Acquisition was $243.9 million, with property, plant, and equipment valued at $172.4 million[50] - The partnership aims to increase third-party revenue streams and expand its footprint in the Midland and Bakken basins through the acquisitions of Gravity and H2O Midstream[56] Revenue Segments - Gathering and Processing segment revenues reached $132.2 million in Q3 2025, up from $81.5 million in Q3 2024, reflecting a significant increase[180] - Net revenues for the gathering and processing segment increased by $98.5 million, or 36.5%, in the nine months ended September 30, 2025, compared to the same period in 2024[199] - Net revenues increased by $47.2 million, or 22.1%, in Q3 2025 compared to Q3 2024, primarily driven by growth in gathering and processing segments[182] - Net revenues for the wholesale marketing and terminalling segment decreased by $45.8 million, or 12.6%, for the nine months ended September 30, 2025, compared to the same period in 2024[207] Expenses - Operating and maintenance expenses for the three months ended September 30, 2025, were $23,076 thousand, up from $15,275 thousand in 2024, representing an increase of 51.3%[72] - General and administrative expenses decreased by $4.3 million, or 16.1%, in the nine months ended September 30, 2025, compared to the same period in 2024[187] - Depreciation and amortization for the three months ended September 30, 2025, was $34.799 million, up from $21.204 million in the same period of 2024, reflecting a 64% increase[112] - Operating expenses increased by $33.4 million, or 37.4%, in the nine months ended September 30, 2025, compared to the same period in 2024[185] Cash Distributions - Distributions to common unitholders totaled $178.2 million for the nine months ended September 30, 2025, compared to $148.1 million in 2024, reflecting a 20.3% increase[21] - Quarterly cash distributions per limited partner unit increased from $1.055 in Q4 2023 to $1.120 in Q3 2025, with total cash distributions reaching $59,898,000 for Q3 2025[97] Strategic Initiatives - The Partnership aims to achieve strong cash flow growth in 2025, driven by the expansion of the Libby gas processing plant and the integration of H2O Midstream and Gravity acquisitions[166] - The Partnership is focused on reducing its leverage ratio to enhance financial flexibility and pursue growth opportunities[165] - The Partnership's strategic focus areas for 2025 include pursuing organic growth opportunities in the Permian Basin and engaging in mutually beneficial transactions with Delek Holdings[163]

Financial Data and Key Metrics Changes - The company reported approximately $136 million in quarterly adjusted EBITDA, an increase from $107 million in the same period last year [3][10] - Full-year EBITDA midpoint guidance has been raised to the upper end of the range between $500 million and $520 million [3][12] - Distributable cash flow, as adjusted, totaled $74 million, with a coverage ratio of approximately 1.24x [10] Business Line Data and Key Metrics Changes - Adjusted EBITDA for the gathering and processing segment was $83 million, up from $55 million in the third quarter of 2024, primarily due to the acquisition of H2O and Gravity [10] - Wholesale marketing and terminaling adjusted EBITDA was $21 million, down from $25 million in the prior year [10] - Storage and transportation adjusted EBITDA remained stable at $19 million compared to the third quarter of 2024 [11] - Investments in the pipeline joint venture segment contributed $22 million this quarter, up from $16 million in the third quarter of 2024 [11] Market Data and Key Metrics Changes - The company noted strong operations in crude and water gathering segments, with record volumes for DDG in the third quarter [4][8] - The competitive position in both Midland and Delaware Basins is increasing due to recent acquisitions and operational improvements [4] Company Strategy and Development Direction - The company aims to become a strong, independent, full-suite midstream service provider, focusing on prudent management of leverage and coverage [4][5] - The successful commissioning of the Libby 2 plant and ongoing efforts in acid gas injection and sour gas handling are key strategic initiatives [3][6] - The company plans to continue optimizing synergies and realizing EBITDA uplift from recent acquisitions [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the earnings trajectory and the ability to meet increased demand for sour gas capabilities [18][32] - The company is optimistic about future expansion opportunities and plans to provide detailed guidance in the next earnings call [20][32] Other Important Information - The Board of Directors approved a 51st consecutive increase in the quarterly distribution to $1.12 per unit [4] - Capital expenditures for the third quarter were approximately $50 million, with $44 million allocated to growth projects [11] Q&A Session Summary Question: Inquiry about producers' increasing activity on acreage ahead of Libby 2 - Management noted strong performance in crude and water, with no material change in drilling activity on their acreage [16][17] Question: Follow-up on CapEx and future flexibility - Management indicated that planning for next year is ongoing and further guidance will be provided in the next earnings call [20] Question: Discussion on equity income performance - The strong performance was attributed to the Wink to Webster joint venture, with expectations for sustainable results going forward [28] Question: Inquiry about the water landscape and competition - Management highlighted the successful timing of acquisitions and the challenges in permitting new facilities in the Delaware Basin [30] Question: Clarification on Libby 3 expansion timing and AGI disposal - Management confirmed that market demand for sour capabilities is strong and that detailed plans will be shared after the planning session [32][34]