Master limited partnerships (MLP) offer high yields and significant tax advantages, a compelling proposition in the current low-yield environment.
The Alerian MLP Index sports a distribution yield of 5.7 percent, though the capitalization-weighted structure of this benchmark means that the 10 largest MLPs by market capitalization have an outsized effect on this metric. On an equal-weighted basis, the 50 stocks that make up the Alerian MLP Index sport an average yield of more than 7 percent.
By either measure, the Alerian MLP Index offers a superior yield to security classes favored by income seeking investors: electric utilities and real estate investment trusts (REIT). Neither the Bloomberg North American REIT Index, which tracks a group of 126 real estate investment trusts, nor the Philadelphia Stock Exchange Utility Index, which comprises 20 electric utilities, can compete with the MLP benchmark on yield.
Your complete guide to energy investing, from growth stocks to high-yielders.
In October 2012, renowned energy expert Elliott Gue launched the Energy & Income Advisor, a twice-monthly investment advisory that's dedicated to unearthing the most profitable opportunities in the sector, from growth stocks to high-yielding utilities, royalty trusts and master limited partnerships.
Elliott and Roger on Sep. 30, 2014
Balanced portfolios of energy stocks for aggressive and conservative investors.
Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.
Our assessment of every energy-related master limited partnership.
Roger Conrad’s coverage of more than 70 dividend-paying energy names.