Energy Transfer Equity: A High-Yield MLP Worth a Look

Master Limited Partnerships (MLPs) are fast becoming a desirable investment vehicle for yield-seekers and energy bulls. The purpose of the partnership is to raise capital in a tax-advantaged way in order to fund capital-consuming projects. This makes the MLP a natural fit for natural gas and oil pipelines where, once the pipeline is funded and built, a steady stream of income flows to the partners for investment.As a reward, cash flows through to the investors and is taxed as income through a K-1 form and not as dividends on a 1099. MLPs receive a federal tax exemption on the partnership entity if 90% or more of the partnership income comes from “qualifying sources” such as natural gas processing, storage and marketing.We have identified Energy Transfer Equity (ETE) as the best bang for your MLP buck. Energy Transfer has interests in both Regency Energy Partners G.P. (RGNC) and Energy... Read more

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