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Classifying MLPs as "income" stocks is a big mistake. It's a costly one too...especially if it's growth you're after.
Yes, the partnerships toss off tons of cash. The high-net worth folks I work with can achieve, for example, $350,000 in cash payouts from investing $5 million in an MLP yielding 7%.
But they're more like growth stocks in disguise...
Remember, the high income is merely a function of the MLP structure. They're set up in a "pass-through" structure. This means they must pass on the vast majority of profits to their investors.
And, up to 90% or more of the distributions you receive from an MLP will be considered a return of capital, not income, by the IRS. You don't pay taxes immediately on this portion of the distribution...
But these big cash payouts are driven by growth. A lot of it.
A $2,500 stake in energy MLPs 10 years ago is worth $10,000 today - twice the return of the S&P 500. And that's just the sector as a whole.
You can do much better, of course, by investing in the group's best players, like the one we'll look at today. The growth potential - realized, of course, by the increasing size of its payouts - is superb.
Just 24 months from now, you could be making 13.4% on every dollar you invest at today's prices.