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Your Guide to Enormous Oil and Gas Dividends

By Matthew DiLallo – Feb 6, 2014 at 1:14PM

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An in-depth look at five emerging oil and gas MLPs: Legacy Reserves LP, QR Energy LP, Atlas Resource Partners LP, Eagle Rock Energy Partners LP, and Memorial Production Partners LP.

Oil and gas MLPs offer investors enormous cash distributions. Some of the smaller MLPs like Legacy Reserves (LGCY), QR Energy (NYSE: QRE), Atlas Resource Partners (NYSE: ARP), Eagle Rock Energy Partners (NASDAQ: EROC), and Memorial Production Partners (NASDAQ: MEMP) offer yields of more than 10%. The problem is that not all of these enormous yields are equal, as each company is pursing a slightly different strategy.

Atlas Resource Partners, for example, is focused on buying up cheap natural-gas reserves in hopes of earning investors solid cash flow now, and outsized future income as the value of those reserves increases. Meanwhile, both Legacy Reserves and QR Energy are focused on higher-margin oil production. Finally, we have Eagle Rock Energy Partners and Memorial Production Partners, which have a more balanced production profile. 

These, however, are just some of the differences between these high-yielding oil and gas companies. To take an even deeper look, I've created the slide show below to help investors decide which of these enormous distributions belong in their portfolios.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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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