CVR Refining LP (CVRR), Northern Tier Energy LP (NTI), QR Energy LP (QRE): Three Super-High-Yielding Energy Stocks

3. QR Energy LP (NYSE:QRE) — 11.7% yield

QR Energy LP (NYSE:QRE) is an exploration and production MLP, focused on developing mature assets in five different oil- and gas-producing regions stretching from the Permian Basin up to central Michigan. It’s a small operation, with reserves of 99.1 million barrels of oil equivalent to its name.

MLPs that are tied to commodities have to deal with the volatile nature of commodity prices, which can lead to unstable yields. In an effort to maximize stability, QR Energy LP (NYSE:QRE) employs a hedging strategy. Approximately 89% of its 2013 oil production and 93% of its 2014 oil production is hedged in an effort to stabilize cash flow.

One other thing to consider with an exploration and production MLP is that commodities are tied to inflation, which means there’s little threat to the partnership if inflation rises. The flip side is that the heavy debt burdens these partnerships require to fund growth can be negatively affected if interest rates rise.

Bottom line
A yield might be your first introduction to a company, but it shouldn’t be your last. High yields are only as good as the businesses they’re built on, and though there’s nothing about these three business models that guarantees they can’t sustain their yields, the nature of their operations suggests it may be difficult.

Fool contributor Aimee Duffy and The Motley Fool have no position in any of the stocks mentioned.

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