Rick Comments on State of MLPs in Barron's


Amey Stone in Barron's writes:

"Many investors who exited energy-focused master limited partnerships earlier this year as oil prices crashed and MLP prices fell even harder, have struggled with when—and if—to get back in. The sector rebounded sharply off its February lows, but since June, gains have stalled as investors judged the easy money had been made and risks outweighed the opportunity.

It’s time to take another look at the sector. MLPs, which yield over 7% on average, are still plenty risky and are not the stable, tax-deferred “toll takers” many investors once thought."

However, as many investors have come to realize, not all MLPs are created equal. Amey continues:

"When it comes to picking individual MLPs, investors need to understand the dynamics of the basin they operate in, the market for fuels they transport, and who their customers are, says Daskin. Distribution coverage, debt levels, and access to capital markets are key to understanding risks."

If you'd like to talk about how MLP's can benefit your portfolio, just drop us a line.


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