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  • Roger S. Conrad

High Yields and Low Taxes

By Elliott H. Gue on Oct. 12, 2012

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.

Energy & Income Advisor

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.

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    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor