7 High-Yielding Natural Gas Pipeline and Storage MLPs to Consider

A few weeks ago we recommended that investors buy the recent dip in the large cap diversified MLPs. We continue to believe that MLPs represent solid income-generating assets with great industry fundamentals. MLPs generally offer stable yields that are typically higher than those of common stocks. In addition, MLP returns have traditionally had low correlations with stocks and bonds, making them good portfolio diversification assets. This article is specifically focused on the natural gas pipeline and storage MLPs. Misconception About Commodity Sensitivity In general, most MLPs have limited direct commodity sensitivity, since a significant amount of their revenues are derived from fee-based contracts that are largely insensitive to commodity price fluctuations.However, MLPs do have some secondary commodity exposure. For example, the prevailing level of natural gas prices influences the level of drilling activity surrounding MLP assets that gather, process, and transport natural gas... Read more