MLPs are publicly traded limited partnerships that derive at least 90% of their cash flows from real estate, commodities or natural resources. In the US there are about 120 MLPs with a combined value around $875 billion.
There are three classes of MLPs: upstream (resource extractors like oil and gas partnerships), midstream (those that transport and process resources, like pipeline operators), and downstream (refiners and distributors).
Rather than paying dividends to shareholders, they pay distributions to unit holders. Another difference is that most midstream MLPs have a general partner, who runs the partnership.
Limited partners (investors) don't have a say in how the MLP is run. In addition, general partners typically hold incentive distribution rights (IDRs), which means that a higher proportion of the MLPs marginal cash flow goes to them as the distribution grows (up to 50% of marginal cash flow).
There are three main drawbacks to MLPs. The first is that those partnerships with a general partner will experience slower distribution growth over time, as IDRs increase. Second, MLPs issue K-1 forms which are used instead of 1099's and can add a bit of complexity during tax preparation.
Finally is the fact that they shouldn't be used in tax deferred accounts such as IRAs. This is because they can generate what's known as UBTI (unrelated business taxable income) that can result in you owing taxes even though the investment is in a tax deferred account.
Attached I've compiled a couple of MLP's I like for a deeper research. Each of them pays a high dividend and has a higer market capitalization, over 300 million.
These are the names I like from the MLP space...