The Best Stock in Oklahoma: Magellan Midstream Partners

We scoured the nation to identify the best stock in every state. Magellan Midstream Partners (symbol MMP) is the publicly traded company we picked in Oklahoma. The company headquarters is located in Tulsa.

A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.

Magellan Midstream Partners by the Numbers

• Headquarters: Tulsa
• Share price: $68.50
• Market value: $15.6 billion
• Price-earnings ratio: 18

(Prices and data are as of June 22, 2017)

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Magellan is a master limited partnership (MLP) that operates pipelines and storage terminals for crude and refined petroleum products in the central and eastern U.S. Income investors have long favored Magellan for its stable, fee-based business, which helps insulate the company from swings in commodity prices. Even so, earnings were pressured recently by a downswing in oil prices that decreased demand for refined petroleum products, although the company remained among the most profitable in its peer group, says Morningstar analyst Jeffrey Stafford. Shares now trade well below historical averages, says CFRA analyst Stewart Glickman, and the company is in an excellent position to capture an uptick in demand for refined products. What’s more, Magellan ended 2016 with enough available cash to cover 140% of its cash distribution to shareholders, which Glickman believes will grow by 10% in 2017. He rates the stock a “strong buy” and sees shares hitting $92 over the next 12 months.