High-quality energy assets with effective monopoly positions that generate virtually recession-proof fee income: That’s the never-ending story of the master limited partnerships (MLP) in our Conservative Portfolio.

If you’re a conservative investor looking for generous yields that are safe, this is the group to focus on. The raw yield numbers aren’t as high as the Aggressive or Growth selections. But the underlying businesses are proof against almost anything the markets and economy can throw at them–a fact they demonstrated once again by posting solid third-quarter numbers.

Last month, three of our holdings reported numbers, all of which measured up nicely to our key expectation. That is they remain healthy and growing enterprises. This week, we focus on the similar robust performance of the other three: Genesis Energy LP (AMEX: GEL), Magellan Midstream Partners LP (NYSE: MMP) and Spectra Energy Partners LP (NYSE: SEP).

Genesis Energy generated available cash before reserves of $23.7 million, up from $22.2 million a year ago, and the MLP successfully added assets and operated existing ones efficiently. Available cash covered distributions by a comfortable 1.5-to-1 margin. That funded the 2.2 percent distribution increase over second quarter levels, adding up to a 9.3 percent increase over year-earlier levels.

In the past we’ve described Genesis as similar to Conservative Holding Enterprise Products Partners LP (NYSE: EPD)–still very much a favorite and a buy up to 30–but focused on oil instead of natural gas. That assertion is much backed up by these results.

With the energy business mired in a slump, it was little wonder transport volumes on Genesis’ assets were lower than year earlier totals, when oil was nearly twice its current price.

Rather, the positive surprise was the 7.6 percent tariff increase and efficiencies, which offset both the drop in throughput and higher maintenance costs that should improve future efficiencies. Genesis was able to use the drop in oil to its advantage at its supply and logistics arm, where it acquired more petroleum products for blending and selling.

Looking ahead, Genesis looks set to benefit from a number of trends, including better margins on its refinery services segment. Units fell initially in the wake of the earnings announcement, probably the result of their steep run-up beforehand and buy-on-rumor-sell-on-news action in the market.

The shares have since recovered, but Genesis Energy LP still rates a buy up to 17. Note the 8 percent-plus distribution has now been hiked for 17 consecutive quarters.

Magellan Midstream Partners LP’s biggest challenge in recent months has been completing the consolidation of its general partner (GP), the former Magellan Midstream Holdings. The deal will reduce costs and provides upside for holders of Magellan Partners, who will no longer have to share profits with a GP.

The owner and operator of refined petroleum products and ammonia storage, transportation and distribution assets, however, also posted solid third quarter results, backing up its current distribution and pointing the way to a resumption of increases in 2010.

Headline distributable cash flow was in line with Street estimates on stronger petroleum products pipeline results. That was mainly the result of expansion projects, which offset the negative impact of lower commodity prices on throughput.

Importantly, the new additions are in key locations and promise to generate a lot more cash flow as the economy bounces back and the energy patch continues to recover.

The ammonia operation again registered a loss, due to maintenance costs. But even it should see a strong recovery due to the fertilizer industry.

Over the long term capital spending on new fee-based assets remains Magellan’s primary formula for growth. The MLP expects total 2009 CAPEX to reach $510 million on growth projects, as opposed to maintenance on existing assets. And it’s increased its expansion capital guidance going forward, a sure sign of management optimism and future distribution growth.

Distribution coverage of 1.1-to-1 in the third quarter is comfortable but should wind up marking a low point as new assets come on line. Buy Magellan Midstream Partners LP up to 40 if you haven’t yet.

Spectra Energy Partners LP has now raised its distribution for eight consecutive quarters since its spinoff from parent Spectra Energy (NYSE: SE) in 2007.

The parent continues to hold the general partner interest as well as a large position in the MLP. That ensures the MLP’s financial strength, as well as the potential for valuable asset “drop downs.”

Parents drop down assets to MLPs essentially to reduce the tax burden on cash flows from fee-generating assets. And with Spectra Energy investing billions of dollars over the next few years, Spectra Energy Partners should get more than its fair share.

Strong third quarter results at the MLP demonstrated again just how valuable drop downs can be. Cash available for distribution during the quarter hit $55.2 million, up 47.2 percent from $37.5 million a year ago. Operating revenue soared 68.8 percent, operating income surged 153 percent and the payout was covered by a hefty 1.7-to-1 margin.

The primary reason: The acquisition of the Ozark assets as a drop down from Spectra Energy, a group of pipeline and storage assets serving the burgeoning Fayetteville Shale gas Mother lode.

There’s a lot more to come for this relatively new MLP, which has already rewarded us with solid gains. The current yield is on the low side for our Portfolio holdings. But that’s more than made up for with growth potential, demonstrated by the distribution’s 14.3 percent growth over the past 12 months. And growth is the surest offset to inflation risk. Buy Spectra Energy Partners LP up to 27.