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.
Recent deal flow in the Marcellus Shale highlights a number of key trends.
Mounting concerns about Spain’s economic mess, combined with poor US employment numbers, are casting a pall over stocks. A silver lining among these clouds: our favorite high-yield US trusts and MLPs have pulled back off recent highs, as we come close to a buying opportunity in these groups.
Caution remains the prudent strategy, as investors get carried away and mistake a few economic tailwinds for a secular shift. We’ve had a great run, but now's the time to lock in some gains.
With upstream operators ramping up appraisal and development programs in the Ohio portion of the Utica Shale, midstream companies have launched a number of projects to support these efforts.
All too often, investors focus on a master limited partnership’s yield rather than its underlying business. This shortsightedness is hardly a new problem.
MLPs face a new challenge in 2012: valuations. Taking advantage of the market's misperceptions and pricing inefficiencies will be the key to outperforming in 2012.
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.
Buying only the highest yielding master MLPs without understanding their underlying businesses and future prospects is a recipe for disaster. Instead, focus on MLPs that will grow their distributions over time.