Matt Badiali Says, Buy Master Limited Partnerships Now

Although the price of oil has risen 38% since June 2017, the price of master limited partnerships still does not reflect this. Therefore, the prices of these high-dividend securities are low, so now is the time to buy and lock in receipt of high, mandatory dividend income.

Master limited partnerships are publicly traded like corporations, but they are structured as partnerships. The law requires to pay out at least 90% of income to the partners or owners. Typically, MLPs own energy infrastructure such as oil and natural gas pipelines, refineries and storage facilities. Their income generally depend more on the demand for energy than on the price of oil and natural gas. That’s because they function mainly as intermediaries between the original extraction from the ground and consumption by the end consumer. They in effect exact a toll on every barrel of oil and natural gas that passes through their equipment. That’s regardless of the final price the end user pays. Check more on The Third-Most Important Base Metal Is About to Rally, click here:http://retirementmillionairedaily.com/the-third-most-important-base-metal-is-about-to-rally/

Despite that, however, the market price of master limited parternships generally tracks the price of energy even though their performance is not dependent on that, as is the profits of oil and gas companies that find new sources and sell it at the gas pumps. When the market price of oil is low, investors don’t value MLPs as highly. As of the end of 2017, the price of oil is the highest it’s been in two years, but the index of MLPs is at its lowest point in those same two years. That makes master limited partnerships a terrific contrarian or value play right now.

Badiali suggests buying the JPMorgan Alerian MLP Index ETN (NYSE: AMJ), the UBS ETRACS Alerian MLP Infrastructure ETF (NYSE: MLPI) or the Alerian MLP ETF (NYSE: AMLP). They pay yields between 7.6% and 8.7%. Follow Matt Badiali on Twitter.

Matt Badiali specializes in picking stocks in the natural resource sector. He believes real wealth is solid assets that produces the metal, food and energy all businesses and people need. As editor of the Real Wealth Strategist newsletter for Banyan Hill Publishing, he covers energy, mining and agriculture. He helps keep the airline business profitable by traveling around the world investigating oil wells, mines and factories. He goes where they are whether that’s Mexico, Papua New Guinea, Haiti, Iraq, the Yukon or Turkey. He also goes to the top financial centers of Hong Kong, Switzerland and Singapore to speak directly with the CEOs and presidents of the leading energy and natural resource companies he covers.

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