Why MLP Pipeline Stocks?
Investors that are close to retirement and looking for a safe and steady income stream may want to seek out energy pipeline operators. These companies transport crude oil, natural gas, and other products through their pipelines and enjoy a stable and profitable business, since their fees are generated from volume and not the price of the commodity and they have little competition. Often times, these entities are organized as Master Limited Partnerships – or MLPs for short. These are entities that trade on the stock exchange like corporations, but differ in the way they are organized. MLP shares are called units and dividends are called distributions, while the often pay distributions equivalent to 5-10% dividend yields. However, there are many tax issues that affect MLPs but not other investments, so it is important to consult a tax advisor before purchasing. For example, a penalty can be incurred if more than $1,000 in distributions are received into a tax-sheltered account like an IR
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