An Oil & Gas MLP Primer and 7 That Currently Yield Over 5%

A Master Limited Partnership (“MLP”) is a limited partnership that is publicly traded on a securities exchange. MLPs combine the tax structure of limited partnerships with the liquidity of publicly traded securities, as most private partnerships are relatively highly illiquid when compared to the public equity markets. MLPs usually provide their investors, the limited partners, with distributions. Oil & Gas MLPs MLPs are limited to certain businesses, mostly involving natural resources. The most popular recent form usually involves oil and gas drilling and/or transportation, though several real estate businesses may qualify as MLPs (the structure and tax requirements are similar to REITs). Several, private equity companies are also structured as MLPs. Most MLPs are pipeline businesses that earn highly stable income from the transport of oil, gasoline and/or natural gas. Many derive their revenue based on the amount of product transported and are not sensitive to price fluctuations except where... Read more