Energy Sources off Strong Yeilds (and Non-Taxable Benefits) for Investors Using MLPs

Energy companies are in hot demand in 2017, but not too hot. Investors are finding energy companies a serious asset for the year, as it may be a nearly perfect storm of opportunity for investors willing to take the dive.

What is going on in the energy space? A few energy providers in the Master Limited Partnerships are steadily providing 5% or more yields. The number is being held for an extended period of time, which speaks well for their longevity in the industry.

The 5% yield may not break down the dam on the whole thing, but it is not isolated. Thankfully, the 5% yields through the MLPs are embraced by major tax savings. Based on current estimates, investors who invest in these energy sources through MLPs can avoid paying taxes on $8 of every $10 they make. Non-taxed earnings top in at nearly 90% for many investors. It is a way to take that 5% even further.

MLP has the potential (and some argue it already has) to supersede the yields and dividends payments of the S&P for the year. The energy space is brimming with potential in 2017, and smart investors are finding places to put their investments, so why not try this before the potential dips.

The popularity of energy is leaving a bit of discrepancy. A number of energy companies (which will go unnamed) are promising a lot of buzz but are providing little in the way of results and yields. So, it is difficult to assert whether there is any longevity there. Their presence is also keeping the energy space a little held back, which actually works to the benefit. If more of these companies were flourishing, the space would be ambushed and falsely bloated. The strategy would help in short term gains, but would hardly help in the long run.

Right now, the energy space is appropriately restrained. The yields are solid without being excessively optimistic. MLPs are providing 5% yields consistently. This is not the 10% number others are promising, but it is also a rate that is being held for more than a few months.