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MLP Returns Better than Other Asset Classes: Pro

Gabriel Moreen of Bank of America/Merrill Lynch was named the top Master Limited Partnerships (MLP) analyst by Institutional Investors’2010 All-American Research Team survey. He shared his sector outlook and best plays.

“Yields on MLPs are currently a lot lower than they were at the beginning of the year, but you’re still looking at yields north of 6 percent," Moreen told CNBC. "MLPs are still pretty attractive relative to other asset classes that pay a yield."

MLPs, limited partnerships that are publicly traded, are tax-advantaged investment vehicles, commonly used in the energy industry. To qualify as an MLP, a firm must earn 90 percent of its income through activities or interest and dividend payments relating to natural resources, commodities or real estate.

“MLPs have traditionally delivered about 5 to 8 percent dividend growth per annum—we expect that to slow a bit over the next few years—but you’re still looking at 3 to 6 percent growth over the next couple of years,” he said.

Moreen's Picks Include:

Enterprise Products

Magellan Midstream

Williams Partners

MarkWest Energy

DCP Midstream

Energy Transfer

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Disclosures:

Moreen has investment banking clients who own shares of EPD, MMP, DPM, ETP and WPZ.

BofA Merrill Lynch owns share of EPD, MMP, WPZ, DPM, ETP and MWE.

In addition, BofA Merrill Lynch has received compensation from EPD, MMP, WPZ, MWE, DPM and ETP.

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