Investors love master limited partnerships because they pay out hefty distributions. But they also typically pay out incentive distribution rights to their general partner, which can have an impact not only on what your MLP is paying you, but how much cash it has to plow into a project to ensure those distributions keep growing. In this video, Fool.com contributor Aimee Duffy looks at how incentive distribution rights can affect an MLPs cost of capital, and which MLPs are avoiding the whole mess altogether.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.