Investing Daily

Over the past year energy-focused MLPs have become more popular for the very same reasons as in the mid-1980s: high yields and tax advantages. Forget yields--focus on fundamentals when making your investment decisions.

Many of our favorite master limited partnerships have pulled back to attractive valuations. Now is the time to buy.

There's a great deal of misinformation published on the Internet and in print media concerning MLP taxation. Back in 2007 a series of articles published in major media outlets claimed that Congress was working on legislation to end the MLP tax advantage. The same rumors have cropped up again lately.

In a market where most income-oriented groups offer near record-low yields, investors are starving for income. All MLPs offer market-beating distributions, as well as attractive tax advantages, but fight the temptation to blindly reach for the highest yields.

In the case of master limited partnerships (MLPs), focusing on earnings per unit--the MLP equivalent of EPS--not only provides an incomplete picture of a company's health but it's also downright misleading.

MLPs offer investors a simple value proposition: double-digit, tax-advantaged yields and strong recession-resistant growth potential.

By late 2008 it was clear even to the man on the street that this country had become chronically over-leveraged. Too many people had taken on too much debt they couldn’t possibly service, and exposure to default was too widespread for the center to hold.

Two years into one of the worst recessions in US history, the four primary US propane pure-play MLPs are all holding up well. There have been zero distribution cuts, and three of the four have continued to increase their payouts at least once over the past year.

Partnerships engaged in the gathering and processing business have taken their lumps over the past year thanks to lower commodities prices and weaker drilling activity. But these conditions won't persist forever; we highlight a high-yielding MLP that offers significant growth potential for aggressive investors.

Steadily growing, recession-proof yields of 7 percent and up: That’s what the four current MLP Profits Conservative Holdings have in common. This week we’re adding another dividend power play to their ranks.

High, tax-advantaged yields are the prime attraction for most investors in master limited partnerships (MLP). And there’s good reason for that: The average MLP in the industry benchmark Alerian MLP Index yields nearly 9 percent, far higher than the 4.3 percent yield available in US Treasury bonds, the 7.2 percent yield on BBB-rated corporate bonds and the 7.8 percent average yield on the Bloomberg REIT Index.

Master Limited Partnerships offer attractive yields and tax advantages, but many individual investors have eschewed this asset class because of confusion about how these securities are taxed. These funds offer all of the income without those taxing headaches.

Breaking news about one of the holdings in our Conservative Portfolio.

MLP Profits’ Growth Holdings aren’t wholly immune from economic ups and downs or fluctuations in energy prices. Compensating for that risk, however, are double-digit yields and generally aggressive business plans that offer strong potential for robust dividend growth. And all of our picks are also battle-hardened, tested to withstand all but the worst possible macro conditions.