Global Partners Yields 7.15%. Is Its Dividend Safe?
Twenty straight quarterly raises sound reassuring, but a wholesale margin windfall and softening retail demand are pulling in opposite directions at Global Partners. Which of those forces will decide whether the next payout increase arrives?
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GuruFocus reported that Global Partners (NYSE:GLP) raised its quarterly distribution to $0.785, and GuruFocus put the yield near 7%. The live math is slightly higher. The $3.14 annualized payout against a unit price of $43.90 works out to a 7.15% forward yield. Income investors want to know one thing: can that check keep growing?
A 20-Quarter Raise Streak Income Investors Can’t Ignore
This was the 20th consecutive quarterly distribution increase. It is up 3.97% from the $0.755 paid a year ago. The market reacted calmly anyway, with units down 7.46% over the past week.
Global Partners stores fuel in its terminal network, sells gasoline and distillates wholesale, and runs about 1,700 retail fueling locations with convenience stores. It is a master limited partnership, so investors receive a Schedule K-1 instead of a 1099. The IRS says partners “must report your distributive share of these items on your return whether or not they are actually distributed to you.” That means the cash you receive and the income you report rarely match.
Coverage Numbers That Leave Room to Spare
Coverage was 2.3x at quarter-end. Distributable cash flow came in at $70.1 million, up from $53 million, and adjusted EBITDA reached $122.9 million. Operating cash flow was $179.76M. GAAP EPS of $1.26 missed the $1.61 consensus, but that figure included a $2.83M charge for paying off preferred units.
Net leverage was about 2.8x. The partnership paid off $75 million of 9.5% Series B preferred units and extended its credit maturity out to Oct 16, 2031. Chief Executive Eric Slifka put it this way:
“With strong distribution coverage and low leverage, we are well positioned to invest in the business, return cash to unitholders, and pursue compelling opportunities with discipline.”
How the Peers Stack Up
Sunoco (NYSE:SUN | SUN Price Prediction) is also raising its payout. Its $1.0148 payout marked an eighth consecutive quarterly increase, but net debt to EBITDA was about 3.7 times after the Parkland deal. CrossAmerica Partners (NYSE:CAPL) kept its payout flat at $0.5250. Its coverage slipped to 1.09x from 1.39x, and leverage rose to 3.72x. Of the three, Global Partners has the lowest leverage.
Biggest Risk Hiding Behind the Wholesale Windfall
Wholesale carried the quarter. Product margin jumped to $111.4M from $78.0M on what management called more favorable gasoline and distillate conditions. Those margins can swing fast: in Q4 2025, wholesale margin fell to $58.3 million from $79.8 million. Retail is softening at the same time. GDSO volume fell to 361.3M gallons from 390.8M. CFO Gregory Hanson said:
“We definitely saw an impact on the consumer from higher retail prices on the fuel volume side.”
Management also warned that steep backwardation will raise the cost of carrying hedged inventory in future periods.
Verdict: Sustainable, With a Wide Margin
The distribution looks safe. Coverage of 2.3x means wholesale profits could fall back to normal and the payout would still be funded, and leverage of 2.8x leaves room to keep the raises coming. For income investors sizing up what an investment like this actually pays out monthly, we ran the math on turning a mid six-figure balance into a steady check in a free income guide here. Track fourth-quarter wholesale margins and retail gallon trends. Those two numbers will show whether the next raise stays modest or gets bigger.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
