Timeline for Where do Master Limited Partnerships (MLP) lie on the risk/yield spectrum?
Current License: CC BY-SA 4.0
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Nov 2, 2018 at 23:49 | vote | accept | roobee | ||
Nov 2, 2018 at 20:09 | history | edited | D Stanley | CC BY-SA 4.0 |
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Nov 2, 2018 at 20:05 | comment | added | roobee | cool. this seems to be a satisfactory answer. i read that you shouldn't pick an accepted question on stackexchange too quickly so I guess i'll wait a little first? also a suggestion now that the answer is complete is putting the explanations from the discussion into your main answer so people don't have to read the discussion. | |
Nov 2, 2018 at 19:55 | comment | added | D Stanley | That's the hope, but as oil/gas production dried up in 2014 the revenues of many pipeline MLPs plummeted (since they were's transporting nearly as much product). And they still need cash to grow so they can service more areas. | |
Nov 2, 2018 at 19:47 | comment | added | roobee | makes sense. another question. from wiki, the US requires that MLPs "must earn at least 90% of its gross income from qualifying sources, which were strictly defined as the transportation, processing, storage, and production of natural resources and minerals." i've read online that this effectively constrains MLPs to industries with very stable incomes/cash flows which i assume means they don't need much capital for growth. wouldn't that make being unable to stop payments less important? | |
Nov 2, 2018 at 19:43 | comment | added | D Stanley | They're typically a percentage of cash flow (not necessarily income), but even so, my point is that the MLP can't suspend dividends, which is a viable option for a non-MLP. | |
Nov 2, 2018 at 19:39 | comment | added | roobee | are MLP payments always or usually a % of profits instead of a fixed absolute value? because if the payments are fixed wouldn't it not matter if the company does poorly? except for the cases of if the company goes bankrupt or you want to sell your LP units for a high price. but i'm assuming that you buy MLPs mostly for the payments and not for hoping to sell it at a higher price in the future. | |
Nov 2, 2018 at 19:18 | history | edited | D Stanley | CC BY-SA 4.0 |
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Nov 2, 2018 at 18:55 | history | edited | D Stanley | CC BY-SA 4.0 |
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Nov 2, 2018 at 18:47 | history | answered | D Stanley | CC BY-SA 4.0 |