rivvir, thank you for that distinction. I bought the ARP preferred before checking. I knew the VNR was cumulative and just assumed the ARP was. I was lucky it was...I should say I think I was lucky...that remains to be seen.
Perry, Preferred shares are essentially a common/debt hybrid. The advantage is they will continue to pay if the common distribution is cut and if the preferred is cut the missed distributions will accumulate and will need to be payed back before the common shares can reinstitute payments. They do not have the tax advantage enjoyed by common shares-Herlod could add some nuance to how they are taxed. My understanding is they are taxed at ordinary income levels. The ARP preferred is yielding around 16.5 and VNR should be something over 12. If things keep going the way they are going and for very much longer nothing is going to be safe.
Thanks Herlod! I bought MEMP yesterday. I just could'nt stand it anymore. I've been out of the common up streams for awhile...mostly playing in the preferred shares of ARP and VNR and the midstreams. The energy situation seems to get more complicated everyday. Good luck everyone!
I agree and I own both. I bought the ARP preferred yesterday. I wish I had waited! I think they are both cumulative. If the payment is cut it accrues and will be payed in full before the common continues to pay. I know the VNR is cumulative and a SA article stated the ARP preferred is as well.
Another thought... the bond market is on the move. MLP's are interest rate sensitive as they need ongoing access to capital.
Has anyone looked at any other MLP's? VNR is off 64 cents. LINE is off 40cents. Also NG has really come down very quickly.