REITs: Learn To Love The Distress

By Richard Shaw (QVM Group): MLP dividend growth has blown away dividend growth by REITs, utilities and the S&P 500 from 1996 through 2011.

By Mike Maher:As the popularity of Master Limited Partnerships (MLPs) has exploded in the last few years, there has been some confusion regarding how to value these assets. Since MLPs are different entities from LLCs or corporations or REITs, the metrics that measure performance of these asset classes are not always ideal to measure the performance of MLPs. Since I have noticed several articles recently highlighting criteria I do not think is appropriate, I think it's worth the time

By Doug Carey:When investing in Real Estate Investment Trusts (REITs) or Master Limited Partnerships (MLPs), investors are sometimes surprised by the hefty tax bill. REITs and MLPs are taxed at ordinary income tax rates if they are in taxable accounts, which takes a big bite out of the total return for many. But there is a way to get around this tax bill if an investor has capital losses he can use. I call this strategy dividends to capital gains conversion.

By Sol Palha:This is part I of the Master Limited Partnership (MLP) Sizzler series; we intend to publish at least 4-5 articles in this series.The dividends some of these MPLS are paying out are comparable to those paid by REITs with high yields such as MFA Financial (MFA) and Annaly (NLY); for example NKA has a yield of 15.6%.

Back in 2010, my startup FlightCaster had hit some serious obstacles and we needed to pivot.  We had set a deadline for ourselves for some metrics and we failed to meet them.  It was a bruising time.  We had to let half the team go.  I had to tell my investors what had gone wrong.  They asked that we consider just giving back the remainder of their money.  It sucked.

No spoiler alerts, please.

What was the best investment niche in the U.S. energy sector the first half of this year? Master Limited Partnerships, or MLPs. Consider one key benchmark, the Alerian MLP Index (AMZ). Since December 31, 2007, the index has returned 66.6% for investors, with about 32% of that from capital gains. Compare that to the S&P 500, where returns slid by 1.55% over the same time frame. This year has been no exception: over the first six months of 2012, MLPs kept up the pace, outperforming all major investment indexes (as follows):

By Six Prime Investing: Buying small positions in several high yielding MLPs can be more profitable than investing in an MLP ETF or ETN. After factoring out management fees, the net return of ETF and ETNs is considerably lower than the highest yielding MLPs. This chart lists some of the most popular MLP ETFs and ETNs with their management fee subtracted from the yield: