With 16 prospective publicly traded partnerships in the pipeline of initial public offerings, income-seeking investors have an ever-epanding lineup of high-yielding securities from which they can choose.

Many of the newest master limited partnerships (MLP) pay a variable-rate distribution because of their exposure to commodity prices, while others operate in business lines that are typically housed in a standard corporation. This latest batch of IPOs holds a number of opportunities for savvy investors.

However, not every MLP is poised for greatness; selectivity is the key to outperformance. Investors must have a thorough understanding of the publicly traded partnership’s business and growth prospects, especially as the universe of MLPs expands and diversifies.

All too often, investors gravitate toward the highest-yielding publicly traded partnerships without understanding the underlying risks. In this issue, we review the prospects of two of the latest MLPs to hit the public market.

In This Issue

The Stories

1. For income-seeking investors, IPOs of master limited partnerships (MLP) can be a lucrative opportunity to buy into long-term growth stories at favorable valuations. In many cases, MLPs grow their distributions at the fastest rate during their first two years as public companies; there’s nothing like a growing distribution to drive price appreciation and total returns. See Surfing the IPO Pipeline.

2. The pipeline of potential MLP initial public offerings remains at an all time high. Here’s our assessment of two of the newest publicly traded partnerships. See Pounding Sand and Swimming Upstream.

The Stocks

Hi-Crush Partners LP (NYSE: HCLP)–Buy < 21 in Energy Watch List
EQT Midstream Partners LP (NYSE: EQM)–Buy < 28 in Energy Watch List