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: MLPs: High Yields and Low Taxes.
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.