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.
Rising cash flow boosts distributions, lifting unit prices. Higher unit prices mean equity capital can be raised more cheaply, increasing the number of energy projects that are profitable to acquire or construct. More projects are built or bought, lifting cash flow further and thereafter distributions.
Roger Conrad, Co-Editor of MLP Profits with Elliott Gue, talks about buy targets for the portfolio.
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.
It’s official: The benchmark Alerian MLP Index logged the best one-year gain in its 14-year history in 2009, a 77 percent total return. After a rally of that magnitude, it’s only logical for investors to wonder if it’s too late to jump aboard.
One group is certain to benefit from the entry of Super Oils into the natural gas market: energy infrastructure master limited partnerships, the purest plays being our Conservative Holdings.
The big payoff for George Mitchell came in 2002 when Devon Energy (NYSE: DVN) acquired his firm in a $3.5 billion deal, a fitting recognition of the experience and acreage his firm had in the Barnett Shale.
No distribution is worth its salt unless the company writing the checks is solid and growing. MLPs enjoy rich tax advantages that allow them to pay much higher distributions than ordinary corporations. But only reliable cash flow guarantees a payout’s stability.
One of our Aggressive Portfolio holdings announced an acquisition this morning, a deal that bodes well for the MLP's unitholders and suggests that conditions area improving for another recommendation that operates in the region.
High-quality energy assets with effective monopoly positions that generate virtually recession-proof fee income: That’s the never-ending story of the MLPs in our Conservative Portfolio.
Publicly traded general partners offer investors a compelling way to leverage their returns in certain MLPs.