The selloff in MLPs has made for plenty of bargains
Once a market darling, master limited partnerships (MLPs) have simply fallen on hard times. Various market forces have conspired against the pass-through entities and have taken them down pretty hard over the last year or so.
On one hand, the collapse in crude oil and natural gas has hurt their bottom lines. More and more MLPs have moved beyond just transporting energy and have begun processing things like natural gas liquids (NGLs). That puts them right in the crosshairs of commodity prices.
At the same time, the wave of E&P bankruptcies has left many MLPs fighting for payment for their services.
And let’s not forget the Federal Reserve. As high-yielding assets, MLPS have been hit as the Fed has begun to ratchet-up interest rates.
All in all, that’s sent MLPs down a staggering 20% over the last year, as measured by the exchange-traded fund Alerian MLP ETF (AMLP).
But that dip has also made many top-notch, quality MLPs pretty big bargains when looking at price-to-distributable-cash-flows (P/DFC) metrics. For investors looking for high income potential, MLPs are simply the cheapest stocks out there.
Here are five super-cheap MLPs to buy today.
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