How to Choose an Energy MLP

Friday's market action signaled at least a relative near-term weakness in the dividend stocks, which have largely led the three-year rally in stocks. The energy master limited partnerships (MLPs), boasting some of the strongest distribution yields, have also been targeted in this swoon, and have dropped significantly in the last few weeks. But not all the MLPs are created equally, and being in the right MLPs going forward is going to keep your portfolio safe without completely abandoning every stock in the sector.

The swoon in MLPs has been part of a rotation going on in stocks, as long-term interest rates in the 10-year Treasury have spiked above 2%. As bonds have dropped in value, those dividend stocks and MLPs have reacted in much the same way: The more the stocks have resembled bonds, the weaker they've been. For MLPs, the more "'bond-like" companies are those that have very static assets, with their value tethered to current distributions....361 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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