Master Limited Partnerships
- When buying shares you become a partner rather than simply a stockholder.
- MLPs are required to pay 90% of earned income to its partners.
- Dividends typically range between 5%-10% annually.
- Income is not taxed at the corporate level…Double taxation avoided.
- Most MLPs are involved in the infrastructure needed to transfer energy (oil/natural gas).
- It’s important to look at past dividend payment history when evaluating MLPs.
- MLPs are not known for a high pace of share price appreciation…dividends are the main source of investment value.