This week in his YouTube series State of the Market, Chief Income Strategist Marc Lichtenfeld investigates the three highest-yielding master limited partnerships (MLPs) to determine whether their generous payouts are sustainable.
MLPs are a less volatile way for investors to play the energy sector.
Whereas oil and gas companies are tied to the price of their underlying commodity, MLPs keep Big Oil on long-term contracts for the processing or transporting of oil or natural gas.
And much like real estate investment trusts, MLPs are required to pay out a portion of their income to shareholders. This is in exchange for not paying corporate income tax.
As a result, many MLPs have higher yields than your average dividend-paying companies.
And as the chart below shows, this year, they’ve more than tripled the performance of the market. Year to date, the Alerian MLP Index has returned 40% to the S&P 500’s 12%.
These investing vehicles can be a strong way to generate income for and in retirement – just be sure to do your due diligence, as you would with any other high-yielder, to ensure the payouts will last.
This week, Marc has done the hard work for you…
He reveals which of the three highest-yielding MLPs can be trusted – and which are likely to cut their distributions – in this week’s State of the Market.
Plus, he explains all of the most important considerations to take into account when investing in MLPs.