Originally Posted by Ronnieboy
What are these? Do you have some examples?
Wikipedia has a reasonable overview
The most common master limit partnership MLP is an oil or gas pipeline. Pipelines are fairly expensive to build but the cheapest way of moving oil or gas from the producing field/port to a refinery/factory/distribution point. Generally the returns are regulated much like a utility. Revenue is pretty independent of oil and gas prices and depends on volume. Contracts are generally multi year things, and include annual increase roughly in line with inflation 3-5%.
Expenses are pretty small except for maintenance and expansion. Hence revenue and profits are quite predictable. Pipelines last for a very very long time, and it is generally crazy for any body else to build a competing one, hence these companies have wide moats. On the other hand these guys aren't Google. (I did have one go up more than 250% but that is an aberration) in general you collect you 7% yield it increase by a couple of percent a year and you forget about them.
Unlike corporations MLP aren't taxed as a corporation rather you own a percentage of the partnership and a responsible for paying taxes Owning MLP is a minor pain in the but at tax time, if you are using Turbo Tax and major pain in the butt without a computer program. . A detailed tax treatment can be found here
A fairly complete list of MLP is found here
My favorites based primarily on Morningstar Dividend Investor newsletter, but other sources are as follows.
SPH, KMP, APU, MMP NS and BPL, XTEX. These all have distribution in the 6-8% range limited or general partner... If you are more interested in future growth rather than current income the general partners have lower yields 3-5% but will likelt see 10%+ increases in distributions, my favs are BGH, MCG, XTXI,