Master limited partnerships (MLPs) can be attractive income-producing investments at any time, but with yields of 7%, 8%, 9%, or higher, yield-hungry investors with a long-term focus should be considering them seriously.
Investors tend to lump energy MLPs into a single bucket, but this isn't the case. MLPs can be broken down into several subgroups: major diversified; natural gas pipelines; storage; oil pipelines; gas gathering and processing companies; oil and gas production companies; propane distribution companies; coal royalty and production companies; shipping companies; fertilizer companies; and others.
Each of the MLP subsectors has its own dynamics, with some more exposed to energy prices, spot rates, and weather than others. One of the top subsectors for investors to consider is natural gas pipeline operators, which basically act as "toll takers" that collect fees for transporting gas from where it is produced or imported to where it is stored or used, often under long-term contracts with suppliers. The companies tend not to be exposed to volatile commodity prices and their cash flows support steady distribution growth.
In a new 70-page report, BullMarket.com covers 50 MLPs and LLCs and gives BullMarket's top picks in each MLP subsector. It also looks in detail at what an MLP is, examines the dynamics of the various industries they operate in, explains and displays various valuation metrics, and answers some common questions.
Among the stocks featured in the report include major diversified MLP Energy Transfer Partners (ETP), natural gas pipeline operator El Paso Pipeline Partners (EPB), oil pipeline operator Plains All American (PAA), oil producer Pioneer Southwest (PSE), natural gas processor MarkWest Energy (MWE), storage company Sunoco Logistics (SXL), propane distributor AmeriGas (APU), coal company Penn Virginia (PVR), drybulk shipper Navios Maritime Partners (NMM), and fertilizer producer Terra Nitrogen (TNH), among many others.
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- Master limited partnerships