Within the energy sector, spinoffs are all the rage these days. In particular, oil refiners have spun off subsidiaries responsible for traditional midstream operations such as storing and transporting crude oil, refined products, and other gases.

The surging popularity of MLPs and their hefty distribution yields, particularly among retail investors, means it's very likely that income-starved investors are hungry for these newly independent stocks. At the same time, not all of these new MLPs are identical, and investors would be wise to understand what can be subtle differences before jumping in.

A viable alternative to traditional refiners
Oil refiners are struggling in the current environment, as rising costs per barrel of oil have served to narrow margins and put a dent in refining profitability. As a result, investors may be looking for a better opportunity within the energy space, and thanks to recent spinoffs, new opportunities in the form of MLPs might be the solution.

This is especially true for income investors who prefer to receive hefty income from their investments, since MLPs are required to distribute the bulk of their cash flow to investors in exchange for their favorable tax status. Moreover, investors in MLPs aren't nearly as vulnerable to the often-volatile swings in oil prices. MLPs that store and transport oil and gas operate much more closely to toll roads, which collect fees based on volumes.

As a result, investors may want to take a closer look at recently spun-off MLPs. One such entity is MPLX LP (MPLX -0.05%), which broke off from refiner Marathon Petroleum Corp. (MPC -0.99%) in October 2012. The first thing investors are likely to notice with MPLX is its relatively modest yield, which stands at 3% currently, low for an oil and gas MLP.

For now, the company is focusing its efforts on positioning itself into the best strategically located assets, but it promises strong distribution growth ahead to make its yield more palatable for MLP investors. After its last quarterly earnings report, in which MPLX bumped up its dividend by 5%, Chairman and CEO Officer Gary R. Heminger pledged further distribution growth in the pipeline. He stated "This increase in the distribution is consistent with our intent to maintain a distribution growth rate of 15 to 20 percent for at least the next several years."

An even newer entrant into the publicly traded MLP space is Phillips 66 Partners LP (PSXP), which was spun off just three months ago by refining giant Phillips 66 (PSX -3.91%). Due to this, Phillips 66 Partners has not yet announced its distribution or distribution growth prospects. As a result, investors will want to monitor the company's announcements closely to know exactly how much to expect in distributions. That being said, judging by the company's recent results, there's reason to be optimistic about growth going forward.

Is there enough growth in the pipeline?
Of course, investors probably want to know if MPLX can deliver on its promises for growth. Thankfully, MPLX's strategic priorities, which it clearly laid out at the Citi 2013 MLP/Midstream Infrastructure Conference, reveal that its ambitious growth plans are probably attainable. The company points investors to its strong liquidity position as well as its continued relationship with Marathon Petroleum as viable growth avenues. MPLX has a well-cushioned balance sheet, which will make acquisitions of promising assets that much easier. The company has an undrawn $500 million credit revolver, as well as $115 million in cash on its books. Furthermore, MPLX holds just $11 million in long-term debt. Clearly, MPLX has more than enough financial flexibility to accomplish its growth objectives, and it will be able to leverage its continuing relationship with Marathon Petroleum to pursue acquisitions directly from its former parent.

Likewise, Phillips 66 Partners obtained a $250 million unsecured revolving credit facility shortly before its IPO, and as of June 30, no amount had been drawn under this facility. In addition, Phillips 66 Partners grew revenue and EBITDA by 42% and 53%, respectively, in the quarter ended June 30. Moreover, Phillips 66 Partners grew its pipeline, terminal, and storage volumes by 9% year over year.

These MLPs will pump out profits and yield
MPLX and Phillips 66 Partners are both well-run businesses with capable management teams. Furthermore, they hold well-capitalized balance sheets, and their strong liquidity places them in great position to acquire assets as they choose to grow their businesses, as well as continuing to provide strong distribution growth for many years ahead.

As a result, both MPLX and Phillips 66 Partners are good bets to produce the unbeatable combination of growth and yield that makes them ideal for investment.