Outlook for CrossAmerica Partners LP Remains Bullish
In the income investing spotlight today: CrossAmerica Partners LP (NYSE:CAPL).
By all accounts, the average price for a gallon of gas is pretty much where it was a year ago, at $3.04 per gallon. Last November, the average price of a gallon of gas was $3.07. Gas prices, of course, vary by region, with states on the West Coast, notably California, generally paying the highest prices, while the Midwest and South tend to be cheaper. (Source: “Today’s Gas Prices By State,” Forbes, November 26, 2025.)
Prices for gas can fluctuate due to local taxes, proximity to refineries, and even supply disruptions. Typically, supply disruptions come from severe weather events, but this year, production delays are a result of aging infrastructure. With that said, nearly all U.S. refiners are operational, which is a positive sign for gas prices.
And, with the U.S. economy chugging along, the fears of a U.S. recession have pretty much evaporated. Funnily enough, in April of this year, JPMorgan said there was a 60% chance of a recession. Fast forward two months, and the bank said it no longer expects a recession. This goes to show how quickly Wall Street can change its mind and how wrong professional forecasters can be. (Source: “Where’s The Recession? – The Failures Of Economic Forecasting,” Forbes, July 30, 2025.)
Altogether, the outlook remains solid for energy stocks like CrossAmerica Partners LP.
Why should investors put CAPL stock on their radar?
The Allentown-Pennsylvania-based oil and gas refining and marketing company has a history of reporting solid financial results and offers a reliable dividend. And in April, CAPL stock hit a record high of $25.73. CAPL has drifted lower from those levels but remains above the 50-day moving average at around $20.58.
CrossAmerica Partners LP is a leading U.S. wholesale distributor of motor fuels, operator of convenience stores, and owner and lessee of real estate used in the retail distribution of motor fuels. (Source: “Who We Are,” CrossAmerica Partners LP, August 19, 2025.)
With a geographic footprint that spans 34 U.S. states, CrossAmerica distributes petroleum for motor vehicles to over 1,800 locations. It’s always looking to streamline its operations and take advantage of industry tailwinds.
For the nine months ended September 30, CrossAmerica sold 96 properties for $94.5 million, resulting in a net gain of $42.5 million.
It also operates seven convenience stores at more than 250 locations across 10 states in the eastern U.S. The sites offer food, various essentials, and car washes. Some locations are also paired with prominent national brands such as “Arby’s,” “Dunkin’,” and “Subway.”
Q3 Earnings & Revenue Beat
CrossAmerica reported another solid quarter, with third-quarter operating revenue of $971.8 million, down from $1.01 million in the third quarter of 2024, but up from the Wall Street consensus of $816.6 million. (Source: “CrossAmerica Partners LP Reports Third Quarter 2025 Results,” CrossAmerica Partners LP, November 5, 2025.)
The company reported third-quarter net income of $13.6 million, up from $10.7 million in the same prior-year period. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were $41.3 million, down slightly from $43.9 million in the same period last year.
Third-quarter gross profit for the retail segment was $80.0 million, down four percent from $83.6 million in the third quarter of 2024. Gross profit for the wholesale segment was $24.8 million versus $27.6 million in the third quarter of 2024.
Its distributable cash flow inched up 2.5% to $27.8 million, from $27.1 million in the third quarter of 2024.
Commenting on the results, Charles Nifong, CrossAmerica’s president and chief executive officer, said, “We generated solid operating results for the third quarter. We also continued to make meaningful progress on our asset-sale initiative, completing approximately $22 million in transactions during the quarter. These sales enabled us to reduce debt by a similar amount, lower operating and administrative expenses, and further advance our strategic objective of enhancing the long-term quality and performance of our portfolio.”
Quarterly Distribution Maintained at $0.5250/Unit
Dependable real estate rental income and motor fuel distribution provide CrossAmerica Partners with solid cash flow, which allows it to provide shareholders with a reliable, high-yield distribution.
In November, the company paid out a third-quarter distribution of $0.5250 per share, or $2.10 on an annual basis, for a current forward yield of 10.25%. (Source: “CrossAmerica Partners LP Maintains Quarterly Distribution,” CrossAmerica Partners LP, October 22, 2025.)
That distribution is safe, too. CrossAmerica targets a coverage ratio of 1.2x. Its coverage ratio for the second quarter was 1.39 times.
Outlook for CAPL Remains Solid
CAPL has been having a pretty solid year. Again, as noted above, it hit a new record high in early April. Just a couple days later though, President Donald Trump unveiled his “Liberation Day” tariffs. Global shares dropped on concerns about what a global trade war would do to the economy.
CAPL has not fully recovered from that sell-off, but it continues to well, up approximately three percent year to date and 12% on an annual basis.
Chart courtesy of StockCharts.com
The Lowdown on CrossAmerica Partners LP
CrossAmerica Partners LP is an energy partnership with a strong domestic footprint. Despite a challenging, industry-wide start to the year, the company has reported solid financial results all year long. This has allowed it to pay down debt, strengthen its balance sheet, and maintain its ultra-high distribution.
While every publicly traded company wants to perform well, this is especially true for companies with a big insider ownership. And CrossAmerica LP Partners falls into this category: 52.43% of all CAPL shares are held by insiders. (Source: “CrossAmerica Partners LP (CAPL),” Yahoo! Finance, last accessed November 26, 2025.)
Meanwhile, 74 institutions hold 24.03% of all outstanding shares. Some of the biggest holders of CAPL include Invesco Ltd, JPMorgan Chase & Co, and Raymond James Financial, Inc.