I have been looking for solid dividend investments for some time and stumbled upon what’s known as MLPs (Master Limited Partnerships) about a month ago. I started looking into these and some of these have been on my track list since.

Most of these MLPS have bounced back after dropping to all time lows some months ago and I am keeping on the sidelines right now looking for an entry point. In the meantime, here’s a little info for your perusal.

MLPs don’t pay income taxes and they trade their “investment units” on stock exchanges just like common stocks. According to the Tax Reform Act of 1986 and the Revenue Act of 1987 to qualify for the tax benefit, 90% of the income should come through income through activities relating to natural resources, commodities or real estate. Instead of paying the corporate income tax, the tax liability is passed on to the “unitholders” of the corporation and the income is taxed at the individual’s rate by filing a K-1.

The MLPs give out cash ”distributions” to the investors which from an investors point of view, can be looked into as dividends. Although these are distributions, the taxation governing these distributions is different from how your dividends would be taxed. For more information on taxation you can visit National Association of Publicly Traded Partnerships or Investopedia Article on Discover MLPs.

Most of the MLPs, that I have looked into have a dividend yield of anywhere from 8% to 11% and are Crude or Natural gas pipelne Operators, propane retailers and/or engage in the business of exploration and production of crude oil or natural gas etc.

Some of the MLPs with a high yield for further investigation are:

EEP : Enbridge Energy Partners LP : Latest Dividend Yield : 10.38%

KMP : Kinder Morgan Energy Partners L.P. :  Latest Dividend Yield : 8.83%

ETP : Energy Transfer Partners LP : Latest Dividend Yield : 8.98%

ETE : Energy Transfer Equity LP : Latest Dividend Yield : 8.14%

EPD : Enterprise Products Partners LP : Latest Dividend Yield : 8.55%