My Favorite Master Limited Partnerships - High Yields and Low Taxes

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...

20 Great Dividend Stocks With Yields Between 10.20% and 20.63%

Any income investor is aware that with interest rates being so low for so long, market prices for bonds and dividend stocks are likely to fall as the Federal Reserve raises interest rates.

But even after the Fed changes direction and begins raising the federal funds rate above the range of zero to 0.25%, where it has been locked since late 2008, rates are likely to remain quite low for a long time.

So the market prices of income-producing securities may not fall as much as many investors fear, or maybe they’ll stage a recovery after the hysteria of the Fed’s likely near-term policy change wears off.

High-growth momentum stocks are nice, but many investors these days are more interested in stability and dependable dividends. 

If you’re an income-oriented investor, the attached list of high yielding dividend stocks is ideal for further research. Each of the stocks has a double-digit dividend yield with positive ROA and positive 5 year earnings growth forecasts.

Some of these stocks may be boring, some of the yields may not be thrilling and some may not have impressive earnings growth in their future. 

But all of the 20 dividend stocks are worth a deeper look when it comes to preserving capital and making regular dividend payments. Check out the list below and sort by company, yield or dividend history.

Here is the list...

20 Really Cheap Value Income Stocks With Yields Up To 32.21%

Dividend investing has always had a certain appeal with investors. Over time, dividend income has comprised a significant portion of long-term stock gains. That's what I've ever told on this blog.

Even better, over the long run, dividend-paying stocks have delivered better total return performance than non-dividend payers and generally have done so with lower volatility. 

But the big gain or retirement contribution comes from capital gains. If your income doubles, your investment amount should also double. If the market pays a higher multiple, you could even gain more.

Today I would like to navigate the focus to the cheapest stocks by fundamentals. Price to book and price to sales are two additional important criteria to evalueate the cheapness of a stock.

Attached you will find a list of stocks with solid future earnings growth while P/B and P/S are below the magic 1. The forward P/E is expected below 15. Damn Cheap how we would say.

Here are the results....

Latest Dividend Growth: Norfolk Southern And Wendy's Hiked Dividends

Yesterday, eleven companies announced a dividend hike and one stock, Walter Industries, cut dividends from 12.5 cents per share to 1 cent. The biggest dividend hike came from BBCN Bancorp who raised its cash distributions by 50 percent. The current yield of BBCN is at 1.95 percent.

Two big names are on the list of the latest dividend growth companies: Wendy's and Norfolk Southern. 

The railroad company Norfolk Southern hiked its dividends by 4 percent and yields at 2.79 percent. The operating margin of the transportation stock is still very high at 27.90 percent. The company benefits from the current shale gas boom.

The fast food chain Wendy's announced a 25 percent dividend hike. That's a great increase if you look at the fundamentals of the company but the earnings outlook is good. Earnings are expected to grow by 14.33 percent for the next five years. The dividend yield of Wendy's amounts to 2.25 percent.

These are the latest dividend growth stocks from yesterday:

Company	Dividend Yield in %	Dividend Growth	Payment Period	Ex-Dividend Date	Dividend Payment Date
Access National	2.86	10.00%	Quarterly	8/5/2013	8/23/2013
Atlas Pipeline Partners	6.33	5.08%	Quarterly	8/5/2013	8/14/2013
Bar Harbor Bankshares	3.12	1.61%	Quarterly	8/13/2013	9/13/2013
Barnes Group	1.34	10.00%	Quarterly	8/23/2013	9/10/2013
BBCN Bancorp	1.95	50.00%	Quarterly	7/31/2013	8/16/2013
Global Partners	6.14	0.86%	Quarterly	8/1/2013	8/14/2013
MPLX L.P.	3.14	4.59%	Quarterly	7/31/2013	8/14/2013
Norfolk Southern	2.79	4.00%	Quarterly	7/31/2013	9/10/2013
StoneMor Partners	9.22	0.84%	Quarterly	8/1/2013	8/15/2013
SunCoke Energy Partn.	7.38	37.58%	Quarterly	8/13/2013	8/30/2013
Wendy's Co	2.81	25.00%	Quarterly	8/29/2013	9/17/2013