What Are Some Good MLP Investments?


Quick Answer

Some good MLP investments when the price of oil is low are Buckeye Partners and Magellan Midstream Partners, reports Kiplinger's. MarkWest Energy Partners and Energy Transfer Partners are also good MLP investments, according to MarketWatch. For MLP ETFs, MarketWatch recommends Alerian MLP.

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Full Answer

When oil prices are low, solid MLP investments are those with low exposure to crude. A good rule of thumb is the further away from the wellhead, the less exposure an MLP has to volume, or price declines, notes David Chiaro, an MLP portfolio manager giving advice on Kiplinger's. Both Buckeye Partners and Magellan Midstream Partners own pipelines that transport refined products. As of 2014, Buckeye Partners yielded 5.9 percent and Magellan Midstream yielded 3.2 percent.

Despite sell-offs in 2015, both MarkWest Energy Partners and Energy Transfer Partners increased dividend payouts. From 2012, MarkWest increased the quarterly dividend payment 21 percent, raising it from 0.76 cents to 0.92 cents. As for Energy Transfer Partners, the MLP increased distributions from 89.93 cents in mid-2013 to $1.035 in 2015, reports MarketWatch.

A good MLP ETF is Alerian MLP, which owns stakes in Enterprise Products Partners as well as MarkWest and Energy Transfer partners, notes MarketWatch. It focuses on midstream assets and yields 7.6 percent as of 2015.

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