Master Limited Partnerships are limited by US Code to only apply to enterprises that engage in certain businesses, mostly pertaining to the use of natural resources, such as petroleum and natural gas extraction and transportation. They combine the tax advantages of a partnership and higher dividend yields with the day to day tradability of common stocks . Unlike corporations, MLPs are not subject to double taxation.
Last week, several Master Limited Partnerships announced increases in their distribution rates. They represented the majority of distribution increases in my weekly list of dividend increases:
TransMontaigne Partners L.P. (TLP) operates as a terminating and transportation company. The company increased its distribution rate by 1.70% to 60 cents/unit. This was the fifth consecutive annual distribution increase since TransMontaigne Partners L.P. went public in 2005. This master limited partnership currently yields 8.50%.
Enterprise Products Partners L.P (EPD). provides a range of services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products, and petrochemicals in the continental United States, Canada, and Gulf of Mexico. The company declared a 1.34% increase in the quarterly cash distribution rate paid to partners from $0.56 to $0.5675 per common unit. Enterprise Product Partners L.P. (EPD) is a member of the dividend achievers index, after raising distributions for eleven years in a row. This master limited partnership currently yields 6.40%.
Genesis Energy, L.P.(GEL) , together with its subsidiaries, operates in the midstream segment of the oil and gas industry in the Gulf Coast area of the United States. The company raised its quarterly distribution to 36.75 cents/unit, which was up from 36 cents/unit paid in the prior quarter and 33.75 cents/unit paid this time last year. The company has raised distributions for seven consecutive years. This master limited partnership currently yields 7.30%.
H.B. Fuller Company (FUL) formulates manufactures, and markets adhesives, sealants, paints, and other specialty chemical products worldwide. The company boosted its quarterly payout by 2.90% to 7 cents/share. This marks the forty-first annual consecutive dividend increase for H.B. Fuller Company, which is a member of the dividend champions index. The stock currently yields 1.20%.
Donegal Group Inc., (DGICA; DGICB) through its subsidiaries, provides personal and commercial lines of property and casualty insurance products to businesses and individuals in the United States. The company’s board of directors declared a $0.115 per share of Class A common stock and $0.1025 per share of Class B common stock. These dividends represent percentage increases of 2.2% for the Company's Class A common stock and 2.5% for the Company's Class B common stock compared to the previous quarterly cash dividend. The company has consistently raised dividends since 2003. The stock yields 3.10%.
Full Disclosure: None
- Master Limited Partnerships (MLPs) – an island of stability for dividend investors
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