Even After Kinder Morgan Inc (KMI)’s Acquisition of its Associated Companies Jim Cramer is Unwilling to Bet Against MLP Structure

Kinder Morgan Inc (NYSE:KMI)‘s acquisition of its associated companies has raised the question on Wall Street as to whether the Master Limited Partnership (MLP) financial structure has run its course? The Kinder Morgan group was amongst the first few who adopted to the MLP structure and was also instrumental in popularizing it, back in the 90s. The MLP structure was soon adopted by a lot of oil and gas companies after Kinder Morgan Inc (NYSE:KMI) popularized it. Basically what the MLP does is allow companies like Kinder Morgan Inc (NYSE:KMI) to pass off all their profits to shareholders as dividends, without paying any corporate tax on it, though the investors need to pay taxes on the amount of profit that they receive. So is this the end of the MLP era?

Kinder Morgan Energy Partners LP (NYSE:KMP)

That and the play on Oil and Kinder Morgan Inc (NYSE:KMI) was the topic of discussion between Jim Cramer and the ‘Squawk on the Street’ team on CNBC.

“I thought it was interesting that he chose to use the Kinder Morgan Inc (NYSE:KMI) as the acquirer, not the Kinder Morgan Energy Partners LP (NYSE:KMP), which is the master limited partnership. This of course got rid of those incentives, the distribution rights that the people are so upset about,” Cramer said.

Cramer then went on to name other companies who are still using the MLP structure and are doing good as well, making his case that he is not going to bet against companies sustaining the MLP structure as of now. He also advised investors that if they are getting a dividend of $2 per share of Kinder Morgan Inc (NYSE:KMI), they should not sell the stock. Cramer also mentioned that even though it wouldn’t be great from tax perspectives, a lot of people have already made a lot of money through Kinder Morgan Inc (NYSE:KMI).

Disclosure: None

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!