MLPs are great for steady income

[dan_s]

A few months ago we selected 18 energy sector Master Limited Partnerships (MLP) that we believe offer low risk, steady growth and high yield. The list includes 7 upstream MLPs and 11 midstream MLPs. We took a look at over 50 MLPs before we selected this list to follow. We like them all.

Matt Denegre, one of our SMU graduate student interns tracks the MLPs for us. He updates the Watch List stats every Monday. Premium Members can find it on the website under the "Watch List" tab.

A quick look at performance since we started tracking the MLP portfolio in late August:

-Entire portfolio is up 15.95% in just over 4 months.

-Market Cap is up 22%

-Upstream: LINE and NRP were the top performers with 23% stock price growth

-Midstream: GEL and MWE were both up 20% by year end

-The lowest performer was BWP, which was up 1%

-The next two lowest performers were KMP and PAA, both of which were up 3%

The upstream MLPs have more commodity price risk so they pay higher quarterly dividends (6.5% to 8.9%).

My top picks right now are EVEP (7.7% annual yield) and GEL (5.9% annual yield) because I believe they are both in position to increase dividends in 2011.