The 25 Highest-Yielding MLPs in March: Northern Tier Energy LP (NTI), Natural Resource Partners LP (NRP), QR Energy LP (QRE)

Page 1 of 2

Dividend investing is popular again. Investors have taken to heart Jeremy Siegel’s studies showing that higher-yielding stocks tend to offer greater returns over time than stocks that offer low or no yields do.

One particular area that has garnered interest over the years is master limited partnerships. Investors are drawn to MLPs for their high yields and tax deferment. MLPs don’t pay taxes at the corporate level, so the tax burden then gets passed to the investor. Without getting into too much detail, because of the structure of the partnerships and the distributions, investors are entitled to a serious tax deferral. Investors should fully understand what they are in for before buying MLPs, but for those willing to do the research, it can be very profitable.

Northern Tier Energy LPThe highest yields can be very tantalizing. As long as a stock yielding 15% doesn’t see its share price fall, you’ll make 15% in one year! In more cases than not, however, an astronomical yield is a bad sign for a stock. Since yields and stock prices move in opposite directions, a high yield usually means that investors have begun to worry about the business and driven down its stock price.

However, certain types of companies, such as MLPs, have to pay out most of their cash flow as distributions, so their yields will be higher than “normal.” Dividends are not guaranteed; you need to make sure that a business is generating enough cash to pay its dividend, or your investment could be disastrous.

I ran a screen for the highest-yielding MLPs. The only limitation I’ve set is that the MLPs must have a market cap greater than $1 billion.

Here are the top 25 highest-yielding MLPs the screen produced.

Company Name Market Cap (millions) Dividend Yield
1 Northern Tier Energy LP (NYSE:NTI) $2,887 16.20%
2 QR Energy LP (NYSE:QRE) $1,018 11.20%
3 Natural Resource Partners LP (NYSE:NRP) $2,428 9.95%
4 Ferrellgas Partners
$1,619 9.77%
5 Breitburn Energy Partners
$1,940 9.66%
6 PVR Partners
$2,181 9.65%
7 Eagle Rock Energy Partners $1,407 9.21%
8 NuStar Energy
$3,897 8.75%
9 Legacy Reserves
$1,495 8.74%
10 Exterran Partners
$1,043 8.31%
11 Suburban Propane Partners
$2,436 8.20%
12 Crestwood Midstream Partners
$1,374 8.13%
13 Atlas Resource Partners
$1,136 8.08%
14 Boardwalk Pipeline Partners
$6,304 7.79%
15 PetroLogistics $2,025 7.72%
16 Regency Energy Partners
$4,135 7.61%
17 Energy Transfer Partners
$14,200 7.59%
18 Enbridge Energy Partners $8,727 7.55%
19 NGL Energy Partners
$1,368 7.45%
20 Rentech Nitrogen Partners
$1,573 7.40%
21 Crosstex Energy
$1,397 7.39%
22 AmeriGas Partners
$4,065 7.31%
23 PAA Natural Gas Storage
$1,412 7.20%
24 Teekay Offshore Partners $2,296 7.15%
25 Alliance Resource Partners
$2,306 7.10%

Source: S&P CapitalIQ

These stocks are a good place to start your research, but they’re not formal recommendations.

Let’s take a look at the top three:

1. Northern Tier Energy
First up is Northern Tier Energy LP (NYSE:NTI) with a trailing yield of 16.2%. Northern Tier Energy LP (NYSE:NTI) is a hybrid MLP which owns a refinery as well as a network of owned and franchised gasoline stations. Northern Tier Energy LP (NYSE:NTI) is benefiting from the large price differential between what oil is selling for in the Midwest, which is even lower than the WTI, and the price of gasoline and other refined products whose prices are reflective of the international price of oil.

Northern’s refinery lies along two pipelines, both owned by Enbridge Inc (USA) (NYSE:ENB): One comes into the U.S. from Canada while the other comes from the Bakken Shale in North Dakota. Northern’s refinery has been earning crack spreads that have continued to rise to nearly $38 per barrel, which is absurdly high. The MLP’s payouts are highly correlated to the company’s crack spreads. Efforts are under way around the country to change the pipeline network to mitigate the large spread between the price of WTI and the price of Brent crude. As these efforts move forward in the next year or so the price differential should decrease and with it so will Northern’s payouts. If you are looking for stable quarterly payouts then pass on Northern Tier.

Page 1 of 2
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 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

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

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!