EPD - Before You Buy High-Yield Dividend Stock Enterprise Product Partners Think About This Top ETF
2024-04-13 03:45:00 ET
Enterprise Product Partners (NYSE: EPD) has long been a favorite of income-oriented investors for its steady and consistently growing distribution. The company has been one of the best-run midstream companies for a long time and at the forefront of shareholder friendly moves, such as being one of the first MLPs to eliminate its IDRs (incentive distribution rights). This allowed the company to continue to increase its distributions even during the energy-price plunge of the mid 2010s.
That said, investing in an individual master limited partnerships (MLPs) like Enterprise Product Partners may not be best for everyone. Instead investing in an MLP exchange-traded fund, or ETF, such as Alps ETF Trust-Alerian MLP ETF (NYSEMKT: AMLP) may be the better option. And it come with one other big benefit: no extra paperwork.
The Alerian MLP ETF tracks the Alerian MLP Index, which holds a variety of midstream energy stocks that are structured as MLPs. The MLP structure was designed to provide tax benefits to companies involved in the production or transportation of natural resources, as well as their unitholders. MLPs don't have to pay taxes at the corporate level, while usually, a large percentage of MLP distributions are designated as a return on capital. This portion of the distribution is tax deferred until the stock is sold and instead reduces an investor's original cost basis.
For further details see:
Before You Buy High-Yield Dividend Stock Enterprise Product Partners, Think About This Top ETF