Master Limited Partnerships: The Perfect Dividend Stocks

Master limited partnerships typically are engaged in the transportation of oil and gas across a vast network of pipelines. While prices of energy products fluctuate greatly, the volume transported does not change by much. In addition, once a pipeline is built, there is little in maintenance expenses for this long term asset and there is little if any competition in the particular geographic area for transporting energy products like oil or gas. As a result, master limited partnerships are able to pass most of their distributable cash flows to investors in the form of distributions. In effect, master limited partnerships are the perfect dividend growth stocks, as they pay above average yields and they also consistently grow distributions at least once per year. The list of consistent dividend raisers was dominated by master limited partnerships. The companies which rewarded their investors with higher dividend incomes include: Kinder Morgan Energy Partners, L.P. (KMP), which owns and manages energy transportation and storage assets, raised its quarterly distributions to $1.15/unit. This master limited partnership is a dividend achiever, which has increases its quarterly distributions for 15 years in a row. Yield: 6.30% (analysis) Kinder Morgan (KMI) owns the general partner interest of Kinder Morgan Energy Partners, L.P. (NYSE: KMP), one of the largest publicly traded pipeline limited partnerships in America, and has limited partner interests in KMP and Kinder Morgan Management, LLC (NYSE: KMR). The company increased its quarterly distribution for the first time since going public in April 2011, to 30 cents/share. Yield: 4.20% ONEOK, Inc. (OKE), a diversified energy company, operates as a natural gas distributor primarily in the United States. ONEOK Inc is the general partner behind ONEOK Partners (OKS). The company raised its quarterly dividend by 8% to 56 cents/share. ONEOK, Inc. has raised dividends to shareholders for nine consecutive years. Yield: 3% (analysis) ONEOK Partners, L.P. (OKS) engages in the gathering, processing, storage, and transportation of natural gas in the United States.123... Read more