In the ongoing hunt for yield, the class of securities known as oil pipeline master limited partnerships (MLPs) came out of obscurity.
There are now more than 100 MLPs to pick from, although not all are related to oil. The advantage of MLPs is that they operate in an industry that delivers something people need on a constant basis: energy. Thus, revenues and cash flow are relatively predictable. Most of that cash flow is thrown off as a distribution to shareholders.
There are risks, in that entities that aren’t geographically diversified can become constricted by local regulators not permitting enough of an increase in local energy rates.
So, which stocks are worth your investment? Kinder Morgan (KMP) is considered the gold standard of the industry, but there are other attractive plays to be aware of. Here are three pipeline MLPs to check out: