MLPs generally generate cash flow by transporting, storing, and producing energy commodities such as petroleum and natural gas products throughout the United States. However, these institutions are not as vulnerable to the ups and downs in oil and other commodity prices that many usually suspect. Rather, these companies generate their revenues through fee-based operations that are generally not affected by the fluctuation of commodity prices.
Shares of MLPs are liquid assets that trade on a stock exchange just like other publicly owned companies. A benefit to owning shares of a MLP is that the entity is contractually required to pay out dividends to its partners, otherwise known as shareholders. However, owning shares of a MLP can result in complicated tax implications if an investor is not thoroughly knowledgeable in the area.
Because MLPs are obligated to distribute dividends to shareholders, they typically have attractive dividend yields. In a low-rate and uncertain economic climate, these high dividend yields from MLPs can result in stable income that makes MLP investing an alluring alternative from other assets and securities.
Outlined below are ten high dividend yielding MLPs. All statistics are as of November 26, 2012.
Martin Midstream Partners L.P. (NASDAQ:MMLP)
- DARS Rating: 3.4 stars
- Dividend Yield: 9.85%
- Annualized Dividend: $3.08
- Market Capitalization: $722.86 million
MMLP is headquartered in Kilgore, Texas and is focused on the storage and distribution of petroleum products and by-products in the United States Gulf Coast region. The company has historically increased dividend payout each year by a very small percentage, most recently boosting dividend payment from 76.25 cents per share to 77 cents per share. The dividend yield for MMLP is currently 9.85% and the stock is down -9.22% year-to-date.
Legacy Reserves LP (NASDAQ:LGCY)
- DARS Rating: 3.4 stars
- Dividend Yield: 9.32%
- Annualized Dividend: $2.26
- Market Capitalization: $1.17 billion
LGCY is headquartered in Midland, Texas and is focused on the the acquisition and development of natural gas and oil properties in the Mid-West. The company’s dividend payout history has not seen significant increases since 2008, only increasing 4.5 cents over that period. The dividend yield for LGCY is currently 9.32% and the stock is down -14.09% year-to-date.
PVR Partners LP (NYSE:PVR)
- DARS Rating: 3.4 stars
- Dividend Yield: 9.20%
- Annualized Dividend: $2.16
- Market Capitalization: $2.08 billion
PVR is headquartered in Radnor, Pennsylvania and is mainly focused on the management of coal, natural resource, and natural gas properties in the United States. The company has had a relatively good history with increasing dividend payments each year, sometimes even increasing dividend payouts every quarter. The only exception to this was a two year period after the financial crisis in 2009 and 2010 when dividend payout did not increase. The dividend yield for PVR is currently 9.20% and the stock is down -8.07% year-to-date.
Vanguard Natural Resources, LLC (NYSE:VNR)
- DARS Rating: 3.4 stars
- Dividend Yield: 8.54%
- Annualized Dividend: $2.43
- Market Capitalization: $1.68 billion
VNR is headquartered in Houston, Texas and is focused on the acquisition and development of oil and natural gas properties in the Mid-West and Southwestern United States. The company pays a dividend on a monthly basis, recently cutting dividend payout from 60 cents per share per month to 20 cents per share per month. The dividend yield for VNR is currently 8.54% and the stock is up +2.93% year-to-date.