Stocks to Buy: An MLP Play
Oil prices continue to be volatile, roiled by events like Hurricane Sandy and increased Middle East tension.
But economic growth in the U.S. suggests that demand for oil and natural gas will rise. And that means that energy-focused Master Limited Partnerships (MLPs) will continue to profit.
MLPs are pipeline operators, storage operators or other midstream asset holders that are required by law to return 90% of their income to investors.
What's more, 80% to 90% of the distribution you get is tax-free until you sell.
If you're looking for a big, sturdy energy infrastructure MLP, Enterprise Products Partners LP (NYSE: EPD) would be your stock to buy.
The partnership owns 50,000 miles of oil and gas pipelines, primarily in the Eagle Ford Shale, where natural gas production has reached record levels.
That means EPD sees steady demand for its services. And the cash the partnership generates is just as steady.
Revenue has jumped by 161% since 2007 and earnings have skyrocketed 180% to $2.69 per share.
The partnership has increased its dividend more than 40 times since going public in 1998 -- and 34 consecutive times going back to 2004.
Its current yield of 5.19% and steady record of boosting distributions makes it an attractive target for long-term investors.
Investors Alley -
