Plains All American: The 8% Yield And High Oil Concentration Make The Company Interesting Again (Rating Upgrade)

Melissa Tucker1.13K FollowersFollow5ShareSavePlay(6min)CommentsSummaryPlains All American Pipeline is upgraded to a buy, benefiting from oil market tailwinds and a streamlined, oil-focused asset base.Post-NGL divestment, PAA will derive 85% of EBITDA from fee-based services, supporting stable and growing distributions with an 8% yield.I expect 2026 EBITDA could reach $2.85 billion if oil prices remain elevated, with potential for upward guidance revision.My fair value is $24 per unit, offering about 15% upside plus attractive distributions, though long-term oil concentration and leverage warrant monitoring. onurdongel/iStock via Getty Images I have covered Plains All American Pipeline, L.P. Common Units (PAA) before, where I outlined the investment thesis in detail. I turned negative after the company missed earnings estimates, divested its CanadianThis article was written byMelissa Tucker1.13K FollowersFollowWith a professional background spanning multiple industries, from logistics, construction to retail, I bring a diverse perspective to investing. My international education and career experiences have provided me with a global outlook and the ability to analyze market dynamics from different cultural and economic perspectives. I have been actively investing for over a decade, honing a strategy that focuses on cyclical industries while maintaining a diversified portfolio that includes bonds, commodities, and forex. My interest in cyclical sectors stems from their potential for significant returns during periods of economic recovery and growth. However, I also recognize the importance of balancing risk, which is why I incorporate fixed-income investments (long or short).Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.