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Juicy Distributions from Unfairly Battered MLPs

Daren Fonda

with Daren Fonda, Freelance Financial Writer, Kiplinger

Oil prices tanked in 2014 and continued to fall through early 2015. This has led to a sharp drop in the unit prices of energy Master Limited Partnerships – pass-through entities that are structured for steady long-term fee-based income that is passed on through distributions to unitholders. Many of these operate in the “midstream” energy space tied to the gathering, transportation, storage and refining of crude oil, natural gas and related products.

The recent drop in oil prices has led to a sharp drop in MLP unit prices despite multi-year long-term contracts and little direct impact from falling oil prices… and made MLP distribution yields attractive – not the best yields necessarily but good solid distributions with relatively low risk. So this may be a good time to do your due-diligence on MLPs and consider establishing positions for juicy distribution income and potential long-term capital gains as oil prices stabilize.

I've been an investment strategist and adviser for over 35 years, leading with a mission of unbiased advice to educate and protect listeners on my weekly radio show on NPR affiliates nationwide. I have been named a “Top 100 Wealth Advisor” by Worth Magazine and “Top Advisor” by Reuters.