Brokerage firm Wunderlich Securities announced on October 13 that it has initiated coverage of Master Limited Partnership (MLP) Tesoro Logistics LP (TLLP:NYSE) with a BUY rating and target share price of C$27.50.

The target share price for the MLP was derived using an evaluation of dividends. Dividends are generally what attract investors to these partnerships. The C$27.50 price is based on an estimated minimum 8.5 percent return and a long-term growth rate of 2 percent.

The MLP asset's include a facility utilized for storing refined products and crude oil along with five related pipelines that exist in Utah, a system used for gathering crude oil in the Bakken Shale/Williston Basin area and almost 10 refined products terminals residing in the Midwestern and Western United States.

The brokerage firm's target price represents an 18 percent premium to the MLP's current price. Wunderlich predicts that the company's distributions will grow 10.4 percent in 2013.

Tesoro Logistics LP closed at C$24.00 on October 13 and hit a 52-week high/low of C$25.67 and C$21.07, respectively.