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1 Thing MLP Investors Need to Know About IDRs

By Aimee Duffy - Sep 16, 2013 at 9:37AM

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Incentive distribution rights can make big deals more expensive at your MLP.

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.

Fool contributor Aimee Duffy has no position in any stocks mentioned. Fool contributor Tyler Crowe has no position in any stocks mentioned. The Motley Fool recommends Enterprise Products Partners L.P. and Magellan Midstream Partners, L.P.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Enterprise Products Partners L.P. Stock Quote
Enterprise Products Partners L.P.
EPD
$27.15 (1.16%) $0.31
Magellan Midstream Partners, L.P. Stock Quote
Magellan Midstream Partners, L.P.
MMP
$51.64 (1.59%) $0.81

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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