A MLP is, as its name indicates, a limited partnership that trades like a stock. It usually invests in energy-producing assets such as oil refineries and shale mines, or in facilities that transport or store oil and gas.
A MLP's yield tends to be high because it doesn't pay income taxes, instead, it passes all income straight to investors, who are responsible for paying tax on their share of the partnership's profits (an investor will receive K1 partnership form when file tax, which could cause a little trouble).
You can expect a wide swing of a MLP's price as oil price swings. So it's essential to look for a MLP with steady payouts.
An example of MLP is Targa Resources Partners LP (NGLS).
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