Investing in MLPs Revealed:
The Best MLP Investments to Own Now

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Master limited partnerships (MLPs) offer investors a simple value proposition: tax-advantaged high yields and strong recession-resistant growth potential. And the group offers capital gain potential as well; the total return on the Alerian MLP Index has trounced the broader market over a trailing 10-year period, returning 13.9 percent annualized against a near 4 percent annualized decline for the S&P. In 2009, the index logged the best one-year gain in its 14-year history, a whopping 77 percent total return! Despite this run-up, MLP investments remain attractively priced and aren’t overvalued on any historical measure.

Just as important, master limited partnerships allow investors to defer much of their personal income tax liability for years into the future or, in many cases, indefinitely. And the group is not subject to America’s usual corporate tax rate, among the highest such rates of any nation in the world. The industry’s favorable tax treatment continues to attract legions of investors looking to avoid a big tax bill to this day.

Sustainable high yields, low taxes, and limited sensitivity to energy prices are a combination that’s hard to beat! There has never been a more opportune time to invest in the master limited partnership group. In our latest report, Master Limited Partnerships Revealed: The Best MLP Investments Own Now, we highlight six of our favorite master limited partnerships to consider for your portfolio today.

Here’s a sneak peak of what we cover in much more detail in the report:

Master Limited Partnership #1—
Rock-solid cash payout and one of the largest and oldest MLP investments in the U.S.

Master Limited Partnership #1 focuses primarily on the ownership of assets related to natural gas. This MLP investment has never cut its dividend and, in fact, has increased its cash distribution for over 35 consecutive quarters! Based on its current distributable cash flow and payout, the MLP covers its distributions 1.2 times, considered a healthy coverage ratio for master limited partnerships.

This pearl among master limited partnerships should be able to grow its distributions by roughly 6 percent year-over-year over the next 12 months. And with a sky-high coverage ratio, the MLP’s distribution offers security well above average.

Based on its unblemished record of boosting distributions, attractive financing position and ongoing organic projects, this MLP is one of the best you can buy.

Master Limited Partnership #2—
Upstream master limited partnership with substantial proven reserves and 100% price-hedged

Master Limited Partnership #2 is involved in the actual production of oil and natural gas. Like most master limited partnerships involved in the upstream business, this MLP focuses primarily on mature fields. But mature doesn’t mean stagnant. Master limited partnerships can undertake low-risk drilling projects on mature fields because the geology and behavior of these fields is well known from years of actual production data.

Best of all, this MLP is one of the most heavily hedged master limited partnerships you’ll encounter. The master limited partnership has hedged 100 percent of its expected natural gas production through the end of 2017, protecting the firm’s cash flow from fluctuations in commodity prices for almost six years. 

Master Limited Partnership #3—
An MLP investment rapidly evolving as a leader in the midstream business

Master Limited Partnership #3's recent results were extremely solid, marking yet another quarter of growth and increased stability since the company began its dramatic transition from propane distributor to midstream giant.

This year's gains were in large part due to asset growth, from both new construction, including a natural gas liquids venture, and acquisitions.

Cash flows for MLP pick #3 clearly support growth and the yield, currently in the 7% range, is secure.

Investing in MLPs

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Master Limited Partnership #4—
Diversified MLP investment and CO2 leader

Master Limited Partnership #4 is among the largest and oldest master limited partnerships in the country. This MLP has an impressive slate of assets, including refined petroleum products pipelines, natural gas lines, crude oil terminals and gas processing facilities. The operations of midstream master limited partnerships like this one are primarily fee-based businesses; shippers pay the company a demand charge whether or not they actually use their capacity and regardless of energy prices.

This MLP is the leading transporter and marketer of carbon dioxide (CO2) in North America.  The CO2 business of this master limited partnership is basically a series of pipelines to transport carbon dioxide to mature oilfields where it’s used to help re-pressurize the field and produce more oil.

This MLP investment also makes gobs of money based on its major ownership stake in two large and mature Texas oil fields. Management of this master limited partnership says that production volume from the two fields is running more than 1,500 barrels a day above the company’s original plans.

Master Limited Partnership #5—
Small MLP investment with tremendous growth potential

For a more aggressive play on natural gas, consider Master Limited Partnership #5. This MLP operates three business segments: natural gas services (about 70 percent of annual cash flow), wholesales propane (15 percent) and logistics related to natural gas liquids (about 15 percent).

The MLP’s NGL logistics business has expanded rapidly in recent years, primarily through judicious acquisitions and expansion projects. Nevertheless, the MLP’s three legacy NGL pipelines in northern Louisiana and southeast Texas continue to enjoy rising throughput from the Eagle Ford Shale.

MLP Investment Pick #5 generates about 60 percent of its cash flow from fee-based activities, while an aggressive hedge book limits the firm’s commodity exposure to about 10 percent.

Master Limited Partnership #6—
One of the most stable MLP investments

Master Limited Partnership #6 owns a series of refined products pipelines and crude oil terminals. These are among the most stable businesses a master limited partnership can own.

Refined products pipelines carry petroleum products like gasoline and jet fuel; like all pipelines, revenues are based on volumes transported, not prices. This MLP is actually increasing the tariffs it charges for transport.

This MLP has two major growth projects in the oil-rich state of Texas, both of which will add directly to cash flow. Plus, it has a long history of grinding out consistent distribution increases over time from its low-risk asset base.

More on MLP Investing

MLPs remain attractively priced with outsized returns forecasted for this year. Don’t be left behind – Get your FREE report today to find out the names of these MLP investments and how you can join in on the profits!

Best wishes for successful MLP investing,

Phil Ash
Phil Ash
Publisher, MLP Profits
Investing Daily 
7600A Leesburg Pike
West Building, Suite 300
Falls Church, VA 22043

Investing in MLPs

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