Last October, I covered MPLX (NYSE: MPLX), a natural gas pipeline and storage company whose parent is Marathon Petroleum (NYSE: MPC).
The stock’s dividend safety rating was upgraded from a “B” to an “A.”
Distributable cash flow, or DCF, a measure of cash flow for master limited partnerships like MPLX, was growing and easily covered the distribution. (Dividends paid by MLPs are called distributions, and shares of MLPs are called units.)
At that time, MPLX had raised the distribution every year since 2013.
Nearly a year later, let’s take a look to see if the distribution is still as strong.
The growth in DCF has remained intact.
While DCF ended up being lower than forecast at the time the review was published, the $5.74 billion the company recorded in 2025 was still higher than the $5.7 billion from 2024.
Importantly, DCF eclipsed the $4 billion the company paid in distributions for a 70% payout ratio.
This year, Wall Street forecasts MPLX will make $5.9 billion in DCF while paying investors $4.2 billion in distributions for a 72% payout ratio.
I’m good with MLPs paying out as much as 100% of their DCF in distributions. By law, MLPs must pay 90% of their earnings in distributions to avoid corporate income tax. As a result, their payout ratios tend to be higher than those of regular corporations.
A payout ratio in the low 70s is just fine for an MLP.
MPLX has continued to raise its distribution, now making it an impressive 13 straight years of distribution hikes.
These aren’t small raises either.
The current quarterly distribution is $1.0765 per unit, which is a big 12.5% boost from last year − the same level of distribution growth as the year before.
For the past five years, MPLX has raised its distribution in the fourth quarter, so we don’t yet know what it will be.
Considering the nearly double-digit growth in each of the past four years, it’s reasonable to expect more than a token raise. It will likely be a meaningful amount that could push the yield up to 8% based on the current price.
There’s no guarantee, of course. That’s just what the yield would be if the company raised the distribution by 10%.
MPLX is growing its cash flow, generates plenty of cash to pay its distribution, and has more than a decade-long streak of raising the payout.
I don’t see any reason to be concerned about this distribution, and I fully expect a raise in the fourth quarter.
Dividend Safety Rating: A
— Marc Lichtenfeld
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