I'd say these pipeline mlp's have some issues too. For regulated ones, I'll guess the roe or some other number is watched for some max. level, and if it goes beyond that, the regulators investigate or prohibit price increases. (Just my guess. I defer to those who know more about regulation/regulators.)
For unregulated pipelines, the oil/gas shippers are well aware they can be held hostage if they have only one pipeline in which to ship product. So in that case they try to encourage a second source pipeline operator to come in and provide an alternative. The lucrative business that the monopolist has, encourages that, I believe. Which means, profits for some sole-source mlp's which are high now, might not be so high in future.
It's just my opinion too, that because pipelines charge by the volumes going through their pipes, the inflationary aspect of increased oil/gas prices isn't significant to profits of the mlp's. If demand for oil/gas drops because of high oil/gas prices, the volume shipped through the pipes and maybe the revenue to the mlp from that, might go down.
That said, I agree with you, Spekulatius, that when comparing hotel reits and pipeline mlp's - their prospects, dividend yields, and possibilities for either div. increases or div. cuts -- it doesn't seem much of a contest. MLP's seem to be the clear choice - regarding both risk and return. That's my preference anyway, and I'm buying a couple mlp's. I still am leery of the K-1 partnership stuff for federal and for state taxes (each state that the pipeline passes through), so I am concentrating positions in order to avoid having to file several K-1 forms. I've also acquired shares in a few funds that specialize in mlp's (some benefits gone with this structure, but no K-1 forms to complete). |
