Shares of Magellan Midstream Partners (NYSE: MMP) hit a 52-week high on Friday. Let's look at how it got here and whether clear skies are ahead.

How it got here
Moving energy around the United States is big business and companies are making record profits in the midstream space right now. High energy prices and increased production domestically have made for a strong midstream energy business, and Magellan is reaping the rewards both operationally and on the stock market.

In the second quarter, the company reported a record operating profit of $167.3 million, up 30% from a year ago. Increased gasoline and crude oil shipments in the company's pipeline business helped drive the growth. Even the ammonia pipeline more than doubled operating margin to $4.5 million.

But this isn't the only midstream master limited partnership that has had strong performance, as you can see below. El Paso Pipeline Partners (NYSE: EPB), Enterprise Products Partners (NYSE: EPD), and Kinder Morgan Energy Partners (NYSE: KMP) all have enjoyed a nice rise over the past five years, just not the breakout that Magellan has had in the last couple of months.

MMP Total Return Price Chart

MMP Total Return Price data by YCharts

The company's growth and strong return on assets is helping drive the stock higher recently. Compared to rivals, Magellan leads the pack in these two metrics.

  Quarterly Revenue Growth Return on Assets Dividend Yield Forward P/E
Magellan 17.3% 8.8% 4.3% 20.1
El Paso (4.2%) 7.6% 6.1% 16.5
Enterprise Products (12.7%) 5.8% 4.7% 21.0
Kinder Morgan (4.4%) 5.6% 5.9% 32.6

Source: Yahoo! Finance

Can the stock's momentum continue?

What's next?
Management is confident that the strong performance can continue at Magellan. According to the last earnings announcement, it increased cash flow guidance by $30 million to reach $520 million, and said it expected to increase distributions by 18% this year, double the previously expected rate.

I think the strong momentum can continue next year as the economy improves, therefore the stock will move higher. The 200% gain of the last five years may be a stretch, but total capital appreciation in the double digits is where I think these midstream companies will land.

The CAPS Community agrees, giving the stock a four-star rating, and 176 out of 181 All-Star Players rate the stock "outperform."

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