I started buying ARLP several years ago when it was in the 20s and then 30s. I write covered calls against it. Most of the time, the calls expire and I just keep the money. Every now and then I get called. However, with ARLP paying 6 to 7% dividends, I just rebought it and went back to writing calls.
However, it is now paying less than 5% and I wonder if I should rebuy? There are other very solid companies paying 3 to 5% and is ARLP the best place to be? If this runup is due to a court decisions, what happens if they change their mind or get overruled?
If this is in a taxable account that seems like a bad strategy as everytime you get called, you need to pay all the deferred tax (assuming you file your tax returns correctly). So you end up making your distributions fully taxable at ordinary income rates rather than tax deferred. MLPs are better just held so the tax on the distributions is deferred indefinitely.