In a previous article titled “Monthly Dividend Payers” I listed a number of companies that pay dividends on a monthly rather than a quarterly basis. In that article I also noted a few of the benefits of receiving monthly dividends as opposed to quarterly dividends. Of the 24 companies identified in that article, 4 of them were Master Limited Partnerships (MLP).
MLPs are a unique type of business organization. In order for a publicly traded company to be considered an MLP the company or partnership must derive approximately 90% of its cash flows from real estate, natural resources or commodities. The advantage of being organized as an MLP is that it combines the tax benefits of a limited partnership with the liquidity of a publicly traded company. A limited partnership does not have to pay taxes from the company’s profits because approximately 90% of the profits and all of the tax liability is passed to the individual unit holders when they receive their distributions and pay their individual taxes.
Limited partnerships normally have two types of partners. The first one is a limited partner who is the person or group of persons that provide the capital to the MLP and receives periodic income distributions from the MLP's cash flow. The second type is a general partner who is responsible for managing the MLP. The general partner receives either a fixed fee or receives compensation that is tied to the profit of the underlying business.
The four companies paying monthly dividends listed in the article “Monthly Dividend Payers” are all engaged in the acquisition, exploitation, and development of oil and natural gas. They are all considered upstream petroleum providers. Their purpose is to buy proven reserves that are already producing product when acquired and then enhance those properties. One of the four, Vanguard Natural Resources (VNR), is unique in that it does not have a general partner and therefore does not pay any compensation to an outside entity.
Below I have provided 9 Dec 2013 closing price charts of these four companies. Good Luck and Good Trading.
MLPs are a unique type of business organization. In order for a publicly traded company to be considered an MLP the company or partnership must derive approximately 90% of its cash flows from real estate, natural resources or commodities. The advantage of being organized as an MLP is that it combines the tax benefits of a limited partnership with the liquidity of a publicly traded company. A limited partnership does not have to pay taxes from the company’s profits because approximately 90% of the profits and all of the tax liability is passed to the individual unit holders when they receive their distributions and pay their individual taxes.
Limited partnerships normally have two types of partners. The first one is a limited partner who is the person or group of persons that provide the capital to the MLP and receives periodic income distributions from the MLP's cash flow. The second type is a general partner who is responsible for managing the MLP. The general partner receives either a fixed fee or receives compensation that is tied to the profit of the underlying business.
The four companies paying monthly dividends listed in the article “Monthly Dividend Payers” are all engaged in the acquisition, exploitation, and development of oil and natural gas. They are all considered upstream petroleum providers. Their purpose is to buy proven reserves that are already producing product when acquired and then enhance those properties. One of the four, Vanguard Natural Resources (VNR), is unique in that it does not have a general partner and therefore does not pay any compensation to an outside entity.
Below I have provided 9 Dec 2013 closing price charts of these four companies. Good Luck and Good Trading.
 Vanguard Natural Resources |  Linn Energy |
 BreitBurn Energy Partners |  QR Energy |
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