3 Ways to Earn 8% to 11% from Master Limited Partnerships
Pipeline companies pump profits from moving America's rising oil production.

MLPs, often spin-offs from energy companies, operate large parts of the nation's energy infrastructure, such as oil pipelines, natural gas processing facilities and storage depots. Because they pass most of their cash flow through to investors, they're popular with income seekers. But MLP shares plunged in March after a tax ruling by the Federal Energy Regulatory Commission raised fears that some pipeline firms' cash flows could be crimped.
Earnings for All
- 35 Ways to Earn Up to 11% on Your Money
- Short-Term Accounts: 1%-2%
- Muncipal Bonds: 2%-3%
- Investment-Grade Bonds: 3%-4%
- Foreign Bonds: 3%-5%
- High-Yield bonds: 3%-6%
- Dividend-Paying Stocks: 4%-6%
- Real-Estate Investment Trusts: 4%-9%
- Closed-End Funds: 4%-9%
- Master Limited Partnerships: 8%-11%
The risks: Analysts say the FERC ruling will have little or no effect on many MLPs. But the move was another blow to the sector, which suffered with the crash in oil and natural gas prices from mid 2014 to early 2016. JPMorgan Chase analysts say that even though rising U.S. oil and gas production is good news for energy-infrastructure firms, fierce competition and the inability of many MLPs to take on more debt could make growth in cash flow and shareholder payouts more difficult for some players. Higher interest rates are also a headwind. And because of the tax issues with MLPs, it's smart to consult a tax adviser before buying.
How to invest: Despite the risks, with MLP share prices beaten down to their lowest levels in at least two years, investors can find high-yielding bargains now. Goldman Sachs recommends Western Gas Partners (WES, $46, 7.9%), which transports and treats natural gas and oil for Anadarko Petroleum and other energy giants. Western, which operates from the Rocky Mountains to Pennsylvania, is on track to generate payouts of $3.83 per share this year and $4.07 in 2019, Goldman says. JPMorgan likes Andeavor Logistics (ANDX, $48, 8.4%), which operates oil and gas pipelines, processing facilities, and storage centers in the western and mid-continent regions. The MLP is expected to pay out $3.90 per share this year and $4.15 in 2019.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
MLPs on brokerage firm Stifel's buy list include Green Plains Partners (GPP, $18, 11.0%), which owns and operates storage tanks, terminals and other facilities for Green Plains Inc., the world's second-largest owner of ethanol production plants. Green Plains Partners is a play on soaring export demand for grain-based ethanol to blend with gasoline in energy-hungry foreign markets, including China, India and Brazil. Stifel projects Green Plains Partners' annual payout to investors to rise from $1.82 per share in 2017 to $1.98 in 2018 and $2.09 in 2019.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
Big Tech Names Rise Above Broad Weakness: Stock Market Today
Some familiar names enjoyed solid rallies on the resolution of outstanding questions, but macro uncertainty hangs over the broader market.
-
Klarna IPO: Should You Buy KLAR Stock?
The Klarna IPO is expected to be one of the biggest offerings of the year, with the buy-now-pay-later firm expected to start trading next week.
-
9 Warren Buffett Quotes for Investors to Live By
Warren Buffett transformed Berkshire Hathaway from a struggling textile firm to a sprawling conglomerate and investment vehicle. Here's how he did it.
-
A Timeline of Warren Buffett's Life and Berkshire Hathaway
Buffett was the face of Berkshire Hathaway for 60 years. Here's a timeline of how he built the sprawling holding company and its outperforming equity portfolio.
-
Berkshire Buys the Dip on UnitedHealth Group Stock. Should You?
Buffett & Co. picked up UnitedHealth stock on the cheap, with the embattled blue chip one of the newest holdings in the Berkshire Hathaway equity portfolio.
-
What Set Warren Buffett Apart
As Warren Buffett prepares for retirement, we reflect on what we've learned from his 60 years of leadership at Berkshire Hathaway.
-
Value vs Growth Investing Isn't So Simple
The difference between growth and value stocks isn't black and white.
-
Stock Market Today: S&P 500, Nasdaq Hit New Highs on Retail Sales Revival
Strong consumer spending and solid earnings for AI chipmaker Taiwan Semiconductor Manufacturing boosted the broad market.
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have Today
Berkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
-
Stock Market Today: Powell Rumors Spark Volatile Day for Stocks
Stocks sold off sharply intraday after multiple reports suggested President Trump is considering firing Fed Chair Jerome Powell.