Delek Logistics Stock: 10%-Yielder Thumping the S&P 500
August 8, 2025
Delek Logistics Units Up 12.5% in 2025
West Texas Intermediate and Brent crude oil prices remain volatile on concerns about the global economy. Those are near-term issues; longer term, the Organization of the Petroleum Exporting Countries (OPEC) expects oil demand to hit 123 million barrels per day by 2050. As a result, the industry will need to invest $18.2 trillion in new oil and gas investments.
For now, though, the outlook for crude remains somewhat bearish. That’s bad news for smaller domestic oil and gas plays, but well-established energy companies like Delek Logistics Partners LP (NYSE:DKL) could pick up the slack and even thrive.
Delek Logistics has market cap of just $2.3 billion, and it is on the smaller side, but it’s firing on all cylinders right now and its outlook is robust. The company reported record second-, third-, and fourth-quarter 2024 results and first-quarter 2025 results and increased its dividend for the 49th consecutive quarter, plus its units are significantly outpacing the S&P 500.
Delek Logistics Partners LP is a midstream energy master limited partnership (MLP) that provides gathering, pipeline, transportation, and other services for crude oil, intermediates, refined products, natural gas, storage, wholesale marketing, terminalling water disposal, and recycling customers in the U. S. (Source: “Investor Update,” Delek Logistics Partners LP, April 1, 2025.)
The MLP’s infrastructure includes 850 miles of crude and product transportation pipelines and a 700-mile crude oil gathering system.
Delek’s key areas of operations around the Permian Basin, the Delaware Basin, and other regions in the Gulf Coast area. This includes Texas, Tennessee, Arkansas, and Oklahoma.
Record Q1 2025 Results
Delek Logistics started out on a strong note, reporting record first-quarter results. For the first quarter ended March 31, it announced that net income increased 19.5% on an annual basis to $39.0 million, or $0.73 per unit. (Source: “Delek Logistics Reports Record First Quarter 2025 Results,” Delek Logistics Partners LP, May 7, 2025.)
The company’s net cash provided by operating activities was $31.6 million in the first quarter of 2025, compared to $43.9 million in the first quarter of 2024. Its distributable cash flow as adjusted was up 10% at $75.1 million.
Delek’s first-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) were $85.5 million. Adjusted EBITDA increased to $116.5 million.
Commenting on the results, Avigal Soreq, the company’s president, said, “We provide the best combination of yield and growth in the midstream sector with a long runway of growth driven by its advantageous position in the Midland and Delaware basins.”
Quarterly Distribution Increased to $1.11/Unit
Thanks to reliable distributable cash flow, Delek Logistics is able to provide investors with a growing distribution. In May, it increased its quarterly cash distribution from $1.105 per common unit to $1.11 per unit. This works out to an annual distribution of $4.44 per unit, for a forward dividend yield of 10%. (Source: “Delek Logistics Partners, LP Increases Quarterly Cash Distribution to $1.11 per Common Limited Partner Unit,” Delek Logistics Partners LP, April 28, 2025.)
It looks like DKL shareholders can look forward to a 50th consecutive increase. In prepared remarks in Delek’s first-quarter results, Soreq, said, “We are proud of the 49th consecutive increase in our distribution and we expect to continue to increase our distribution in the future.”
DKL Stock Crushing the Broader Market
Shareholders, it seems, like it when companies report record financial results. As of July 27, DKL units are significantly outpacing the S&P 500, up:
- 4.5% over the last month
- 15.5% over the last three months
- 12.5% year to date
- 22.7% year over year
Chart courtesy of StockCharts.com
The Lowdown on Delek Logistics
The energy sector has been facing headwinds this year on concerns about how the economy will respond to trade wars. So far, the fears of Armageddon have not held up.
U.S. consumer spending remains solid and the country’s job market continues to post solid gains. Investor optimism is also being buoyed by a trade deal between the U.S. and European Union (EU), the world’s largest trading block.
This should help the U.S. avoid a recession, which would be good for the energy sector. Delek isn’t waiting for that to happen. It’s quietly reporting record results and providing solid guidance. For 2025, the MLP is on track to deliver strong adjusted EBITDA in the range of $480.0 million to $520.0 million.
Delek Logistics’ share price is thumping the broader market, and the strong guidance should help the MLP continue to raise its quarterly distribution.
