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Energy Transfer Partners, L.P. Message Board

  • counselor711322 counselor711322 Nov 13, 2012 1:03 PM Flag

    Selling over fiscal cliff concerns "makes no sense" with MLPs

    He pointed to the Alerian MLP [AMLP 15.8101 -0.0599 (-0.38%) ], which investors have been dumping. “It lends itself to panic selling, and that’s what it looks like right now,” said Massocca.

    “Utilities got killed and that makes sense. That’s a qualified dividend,” he said. “It makes no sense with MLPs. They’re not qualified dividends.”

    Stovall said a change in the dividend rate could actually be an advantage for MLPs. “REITs will probably look a little more attractive under the new (possible) tax environment because there’s a more level playing field, the same as limited partners,” he said.

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    • While MLP's are not qualified dividends, I presume they will be subject to the new 3.8% Obamacare tax and any other tax increases instituted January 1st. If so, ETP's selling pressure may still be modest because most people probably don't have a lot of gains to protect (only distribution income), unless they have been holding a very long time. A KMP investor may be in a different situation given that stocks rise in the past year or two.

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