It can’t exactly come as a surprise after a decade of spectacular MLP outperformance that many partnerships are priced far in excess of what tax-paying corporations fetch on a cash flow basis. Western Refining  at 3.3 times trailing EBITDA is out there competing against the Apples (Nasdaq: AAPL) of this world, which, while twice as rich on an EV/EBITDA basis is, let’s face it, Apple and not the operator of a couple of refineries in “Breaking Bad” country.

And meanwhile here’s Northern Tier Energy (NYSE:NTI) at more than 9 times EV/Ebitda (well above Apple’s perch) because it happens to be a variable-distribution MLP that promises to regularly disgorge income, albeit in irregular portions. Based on the refining industry’s past stroke of good fortune, Northern Tier boasts a 14 percent trailing yield and a 5 percent prospective one, with plausible returns over the long haul probably lodged somewhere between those two extremes.

Part of the attraction of NTI and most other MLPs is, of course, their exemption from the federal income tax. But by any rational measure the disparity in valuation is much wider than the limited tax advantage of MLPs over corporate dividend payers would suggest.

And that’s likely because NTI and other MLPs still predominantly held by individual investors are competing less against stocks than against bonds for the favor of income investors. Right now, competing against bonds is still a cinch, because less than 3 percent to lock up money in Treasuries for a decade is no one’s idea of a bargain.

But if one of these years rates were to revert to their historical average, a lot of MLPs leveraged to the hilt could find themselves in competition with, say, a 5 percent yield free of credit and business risk. That wouldn’t be such a walk in the park. And it already gets a little bit less of one by the day as corporations find a way to sprinkle some of that magic MLP pixie dust on their own heavily discounted income spinners. Why pay up for NTI when you can own WNR? The private equity firms that recently sold their stake in NTI to WNR were happy to do so at a small discount to NTI’s listed price.

There really isn’t all that much standing in the way of further such arbitrage. The corporate sponsor of an MLP is expected to furnish it with a sunk cost for the books, aka a tax shield, that will turn the bulk of the MLP’s distributions, say, 80 percent, into tax-deferred return of capital. And that’s about it, provided lawyers and accountants are watching out for complications from disguised sale and basis limitation rules.

I worry that this trend is almost certain to persist and could cause MLPs to lag behind cheaper energy corporates in the coming months and years. Rates haven’t really jumped yet and already overextended , growth-challenged MLPs with middling yields are getting picked off: Boardwalk Partners (NYSE: BWP) last month, El Paso Pipelines (NYSE: EPB) today. See Portfolio Update for our rationale for getting out of El Paso. And note that both of this month’s Best Buys are benefiting from the corporate parade into MLPs. Western Refining and Crosstex Energy (Nasdaq: XTXI) are two general partners in control of valuable MLP assets. Both should appreciate in absolute terms and relative to the MLPs they manage.

In Focus subject Energy Transfer Equity (NYSE: ETE) hopes to sell you sometime early next year on, yes, another MLP. ETE has been one of the better performing MLPs of late on enthusiasm for its LNG export project and other growth spurs. Now it wants to market a “pure-play LNG” MLP just to see what the market might bear. It should get paid handsomely to find out.

Meanwhile, a couple of MLPs hope to get paid handsomely hauling Bakken crude to distant destinations that can use it. That remote but fast-growing shale play still lacks sufficient takeaway capacity, but that’s about to change in a hurry. We preview the coming change in Sector Spotlight.

Whatever the future holds for MLPs, the key is to seek out thriving, dynamic businesses and not just yields. Because the yield can always go higher if that’s all it is.