All too often, investors focus on a master limited partnership’s yield rather than its underlying business. This shortsightedness is hardly a new problem.
Master Limited Partnerships
Master limited partnership (MLP) investments offer a simple value proposition: tax-advantaged high yields and strong recession-resistant growth potential.
MLPs allow investors to defer much of their personal income tax liability for years into the future or, in many cases, indefinitely. Unlike regular corporations, a master limited partnership doesn’t pay traditional corporate-level tax. Instead, these partnerships pass through the majority of their income to investors in the form of regular quarterly distributions. In other words, 80 to 90 percent of the distribution you receive from the MLP is tax-deferred.
Learn more about how to add master limited partnerships to your portfolio with the latest in-depth analysis in the archive below. For a detailed understanding of the MLPs, including what they do, how they are taxed and the best plays to consider for your portfolio, check out our free guide: Master Limited Partnerships: High Yields and Low Taxes.
Master limited partnerships (MLP) are one of the surest groups for solid growth and sustainable distributions.
Investor psychology and demographics will also contribute to master limited partnerships’ long-term growth prospects.
Partnerships are highly tax-advantaged securities, but these advantages can easily become disadvantages if investors don’t understand the basics of MLP taxation.
The MLPs that are best-positioned to benefit from rising onshore oil and NGL production are those with existing infrastructure in the hottest plays–the barriers to entry are steep.
Here are three reasons why MLPs should be at the top of your shopping list.
Older master limited partnerships (MLP) don’t necessarily offer the best distribution growth potential. In many cases, MLPs grow distributions at the fastest rate in their first two years as public companies.
Partnerships are highly tax-advantaged securities, but these advantages can easily become disadvantages if investors don’t understand the basics of MLP taxation.
Don’t fret over the recent pullback in the Alerian MLP Index; our favorite names still boast strong fundamentals.
The four criteria that comprise the MLP Profits Safety Rating System are the key to finding long-term wealth-builders in the master limited partnership sector.
