Why Are These MLPs Spinning Off C-Corporations?

MLPs are all the rage in the energy sector, and several companies want to get into the game by spinning off assets into an MLP strucutre. But Fool.com contributor Tyler Crowe sees a few companies trying their hand at the other direction and spin off some of their assets into C corporations. Linn Energy (NASDAQ: LINE  ) was one of the leading companies to try its hand at spinning off a C-corp with its IPO of LinnCo (NASDAQ: LNCO  ) back in October. Now some others are looking at it as well.

In this video, Tyler and Aimee Duffy discuss how these moves not only help companies raise more capital, but how they also provide a vehicle for institutional investors to get in the game and facilitate acquisitions. Investors should keep a sharp eye on upstream MLPs like these -- not only because of share dilution, but also because some of the risks the upstream sectors has that could pose a larger threat to an MLP.

The growing production of natural gas from hydraulic fracturing and horizontal drilling is flooding the North American market and resulting in record-low prices for natural gas. Enterprise Products Partners, with its superior integrated asset base, can profit from the massive bottlenecks in takeaway capacity by taking on large-scale projects. To help investors decide whether Enterprise Products Partners is a buy or a sell today, click here now to check out The Motley Fool's brand-new premium research report on the company.


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