Master Limited Partnerships are income securities
Investing in Master Limited Partnership stocks – MLPs - means investing in income securities. And, every properly constructed portfolio contains securities to generate income.
MLPs have delivered over 17% annualized total returns over the last decade. "The MLP sector today could be on a similar trajectory to REITS in the late 1980s and I believe that tremendous growth lies ahead given the strong need for new energy infrastructure investment,”… Mary Lyman, Executive Director of the Coalition of Publicly Traded Partnerships
Most Master Limited Partnerships (MLPs) operate in oil & gas related businesses including energy processing and distribution. The remaining MPLs operate in a variety of businesses including coal, timber, other minerals, real estate, and some miscellaneous businesses. Most trade on the New York Stock Exchange. Master Limited Partnership stocks (MLP) are pass-through entities or businesses that are taxed at the unitholder level and generally are not subject to federal or state income tax at the partnership level. Annual income, gains, losses, deductions or credits of the MLP pass through directly to its unitholders. Unitholders report their allocated shares of these amounts on their individual tax returns, as though the unitholder had incurred these items directly.
When the tax reporting season arrives, the MLP will furnish investors with a schedule K-1 to provide the information required for income tax reporting purposes. MLPs do not pay income taxes on their earnings and therefore their "dividends" are not eligible for the 15% tax rate.
Researching Master Limited Partnerships
BondsOnline Yield & Income Insight: Researching MLPs as an individual investor can be difficult: the research found on most websites is:
(1) delayed in getting to you (institutional investors get it immediately, and other investors get it days or weeks later), and;
(2) brief, or non-existent.
BondsOnline Yield & Income Insight is independent research for the income investor.
We provide immediate access to in-depth Master Limited Partnership research in our comprehensive subscription service PreferredsOnline. For a free report, please contact us or visit PreferredsOnline.
These stocks represent some of the most active MLPs: Buckeye Partners LP (BPL), Enbridge Energy Partners LP (EEP), Enterprise Product Partners LP (EPD), Energy Transfer Partners LP (ETP), Kinder Morgan Energy Partners LP (KMP), Magellan Midstream Partners LP (MMP), Northern Borders Partners LP (OKS), Plains All American Pipeline LP (PAA), TransMontaigne Partners LP (TLP), Valero LP (VLI).
For a comprehensive discussion of what MLPs are and how they work plus a discussion of some of the tax ramifications of MLPs, see the Coalition of Publicly Traded Partnerships' Publicly Traded Partnerships: What they are and how they work.
For further background information on limited partnerships, you can check out the website of the Coalition of Publicly Traded Partnerships.
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