CrossAmerica Partners LP: Units of 9.6%-Yielder Thumping Broader Market?
June 16, 2025
JPMorgan Chase Still Bullish on CAPL Stock
During periods of economic uncertainty and stock market volatility, it’s always a good idea to diversify with a reliable, high-dividend-yielding stock with great long-term growth potential. And that’s what you get with CrossAmerica Partners LP (NYSE:CAPL).
CrossAmerica has a long history of reporting solid financial results and a reliable distribution, plus, in April, CAPL stock hit a record high. With summer just around the corner, there will be an increase in drivers on the road, which bodes well for this company.
CrossAmerica Partners LP is a leading U.S. wholesale distributor of motor fuels, an operator of convenience stores, and an owner and lessee of real estate used in the retail distribution of motor fuels. (Source: “Who We Are,” CrossAmerica Partners LP, June 10, 2025.)
With a geographic footprint that spans 34 U.S. states, CrossAmerica Partners distributes petroleum for motor vehicles to over 1,800 locations. 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.”
This is an important combination. Businesses with a diversified revenue mix that include more stable predictable revenue from convenience stores and restaurants have done better than those gas stations without.
Businesses with diversified operations like CrossAmerica Partners are expected to see their sales grow significantly over the coming years. North American service stations sales are projected to grow from $12.6 billion in 2023 to $20.44 billion in 2031, expanding at a compound annual growth rate of 7.15%. (Source: “North America Filling Station and Gas Station Market by Application | Projections,” LinkedIn, September 30, 2024.)
CrossAmerica Partners LP Sees Solid Q1 Results
For the first quarter ended March 31, 2025, CrossAmerica Partners reported a net loss of $7.1 million, which was a big improvement over its first-quarter 2024 net loss of $17.5 million. (Source: “CrossAmerica Partners LP Reports First Quarter 2025 Results,” CrossAmerica Partners LP, May 7, 2025.)
The company’s gross profit for the retail segment was up 16% at $63.2 million, while gross profit for the wholesale segment was down one percent at $26.7 million.
Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased slightly to $24.3 million, from $23.6 million in the first quarter of 2024.
CrossAmerica’s distributable cash flow slipped to $9.1 million from $11.7 million.
During the first quarter, the company sold seven sites for $8.6 million, resulting in a net gain of $5.6 million. These sales are part of CrossAmerica’s ongoing real estate optimization efforts.
Commenting on the results, Charles Nifong, the company’s president and chief executive officer (CEO), said, “The first quarter was once again a challenging start to the year for the industry overall. While our EBITDA improved modestly compared to the prior year, our results reflect the difficult operating environment.”
“Our retail fuel volume was in line with the broader market, and we outperformed in same-store merchandise sales. A highlight of the quarter was the relative strength of our fuel margins across both our wholesale and retail segments.”
Quarterly Distribution of $0.5250/Unit Maintained
Dependable real estate rental income and motor fuel distribution provides CrossAmerica Partners with solid cash flow, which allows it to provide shareholders with a reliable, high-yield distribution.
In May, the company paid out a first-quarter distribution of $0.5250 per share, or $2.10 on an annual basis, for a current forward yield of 9.6%. (Source: “CrossAmerica Partners LP Maintains Quarterly Distribution,” CrossAmerica Partners LP, April 22, 2025.)
That distribution is safe, too. CrossAmerica targets a coverage ratio of 1.2x. Its coverage ratio for the trailing 12 months ended September 30, 2024, was 1.04 times.
CAPL Units Hit April Record High
As you can see in the chart below, CAPL stock was on a pretty strong run in the back half of 2024 and opening months of 2025. In fact, the stock hit a record high of $25.18 on April 2.
But, like the broader markets, individual stocks took a hit in early April on concerns about how a global trade war would impact the economy. While these concerns persist, the markets have shrugged off any near-term challenges.
CAPL trended higher in April, but has fluctuated since early May. In early June though, the stock rebounded off a support level near $21.50, and it has been inching up since then.
As of this writing (June 10), CAPL units are up:
- 8.0% over the last six months
- 5.0% year to date
- 20% year over year
This is far better than what’s happening on the S&P 500 and Nasdaq.
Chart courtesy of StockCharts.com
The Lowdown on CrossAmerica Partners LP
CrossAmerica Partners LP is an energy partnership with a strong domestic footprint. Despite an industry-wide challenging start to the year, the company improved its net loss, reported modest adjusted EBITDA growth, and outperformed in same-store merchandise sales. It continues to have a strong balance sheet and maintains its unit distribution, too.
While the near-term economic outlook remains somewhat subdued, the longer-term outlook for CrossAmerica Partners is solid. This bodes well for its units and dividends.
And that is good news for insiders, who collectively hold 52.41% of all shares. This kind of skin in the game should motivate management to deliver stronger results. (Source: “CrossAmerica Partners LP (CAPL),” Yahoo! Finance, last accessed June 10, 2025.)
Meanwhile, 76 institutions hold 24.3% of all outstanding shares. Some of the biggest holders are Invesco Ltd, JPMorgan Chase & Co, and Raymond James Financial, Inc.
