Top 5 Best MLPs to Invest in 2013

By | April 12, 2013

The benefit of owning MLPs in an investor portfolio is that, they often present one of the best returns. Master limited partnerships or MLPs could be very good income yielding investments for anyone.

But for investors looking for returns averaging 9% and above with a long term focus ought to be considering these investment vehicles seriously.

To be very clear, I must tell you that most of the time investors handle energy MLPs into a sole basket. And this shouldn’t be the case as MLPs are of several groups and sub groups including, diversified natural gas pipelines, storage oil pipelines, gas gathering and processing companies, propane distribution, oil and gas production companies, coal royalties, sea transport, and fertilizer companies.

Each of these sub sectors has their own undercurrents with some of them more exposed to energy prices, weather, and spot rates than others. One of the top sectors for investors to ponder over for a fruitful investing fixation is, to consider natural gas pipeline operators.

Basically these act as toll takers, collecting fees for transporting gas from where it is produced to where it is stored and consumed; frequently these are under long term contracts with providers, and not exposed to volatile commodity prices and their cash registers keep ringing consistently.

As a trader, research is everything. You’re only as good as your ideas. And your ideas are only as good as the research that goes into them. Investors seeking diversification in the space may want to look at these.

Here’s a list of the Top 5 Best MLPs I was so impressed with. These are great businesses trading for great prices; My advice, structures around these companies.

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MLP Energy Transfer Partners (ETP), Energy Transfer family of partnerships is committed to providing incomparable service to its customers with attractive returns to its investors, this is a Texas-based company that started operations in 1995.

From a small intrastate natural gas pipeline operator, this is now the largest and most expanded investment grade master limited partnerships in the United States. Budding from roughly 200 miles of natural gas pipelines in 2002, to approximately 69,000 miles of natural gas, natural gas liquids (NGLs), refined products, and crude oil pipelines today.

Sunoco Logistics (SXL) Terminal-ling, storing crude oil and transporting, refined petroleum products. Sunoco Logistics Partners L.P. (NYSE: SXL) is a publicly traded master limited partnership molded in 2002, with an objective to acquire, own and operate. A mix of crude oil and refined products pipelines, as well as crude oil acquisition and marketing assets.

Plains All American Pipeline (PAA) has a long drawn history of growing its distributions to boost income. With the latest sharing, the MLP partnership has hiked quarterly cash distribution to its partners in 34 out of the past 36 quarters.

Plains All American Pipeline is a very good bet in this list, that has protracted its exercise of sharing more benefits with its unit holders by swelling its cash distribution rate.

This has increased its quarterly cash distribution by 2.2% sequentially and 10% year over year to 57.50 cents per unit on all of its outstanding limited partner units.

Vanguard Natural Resources (VNR), are a publicly traded limited liability company focused on the acquisition and development of mature, long-lived oil and natural gas properties. With the primary business objective to generate stable cash flows to enable monthly cash distributions to unit holders.

They own properties located in the Arkoma Basin in Arkansas and Oklahoma Permian Basin in West Texas and, the Williston Basin in North Dakota and Montana New Mexico.

Mark West Energy (MWE) – Midstream leader with strong distribution growth, MarkWest Energy Partners, L.P. (NYSE: MWE) is a publicly traded master limited partnership formed in January 2002, engaged in gathering, processing and transportation of natural gas, fractionation, storage and marketing of NGLs.

And there’s no catch… So don’t waste a bunch of time thinking about it. Really, though, what is there to think about? If you’re a serious investor or a serious trader, this is an absolute, no brainer go with your best choice or just vote up your best.

Disclosure: I don’t have any positions in any stocks mentioned herein, and no plans to initiate any in the near future as well.

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One thought on “Top 5 Best MLPs to Invest in 2013

  1. Diane Crawford

    I’ve owned shared in Wlms, allAmerican and kinder Morgan. What a pain when doing your taxes. Never heard of this BIG $$ maker! I’m left dubious.
    I suggest others should be also. Don’t think this will get printed. Diane


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