Master limited partnerships (MLPs) have long been a great way for investors to get high tax-advantaged income into their portfolios. Thanks to their toll road-like stability, they feature plenty of steady cash flow. But they aren’t the only way investors can lock in midstream income. Our newest Best Dividend Capture Stocks List pick – and its huge 7.8% yield – is another example.
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick is a so-called general partner of one of the largest and most important midstream systems in the country. Pipeline limited partnerships are an interesting legal structure, with most general partners being privately held or tucked away in another public corporation. However, there are a few that are publicly traded and the rewards can be great. In exchange for managing the pipeline (the MLP), they get a share of the profits and other incentives. They then pass on these distributions as big dividends.
Given rising energy demand and our pick’s general partner status, our new selection makes for a great dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Friday, April 28, our pick is primed for the strategy, as is evident by its historical track record of a recovery period within an average of seven days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest midstream pick could be a lucrative option.
