Publicly traded LLCs (limited liability companies) can be an excellent way for investors to generate income from their investments. That is because many of these companies operate in a similar way to master limited partnerships and return all, or nearly all, of their cash flow to investors. These companies also don't have all of the same tax issues that can sometimes arise with master limited partnerships, such as the unrelated business income tax. Let's take a look at one of these companies: Vanguard Natural Resources.

Vanguard Natural Resources got its start as a producer of natural gas, but it has since expanded into oil. Today, the company produces both resources from its various oil and gas fields located all throughout the Midwestern United States.

Source: Vanguard Natural Resources

As can be seen from the chart above, Vanguard has a large number of producing fields. One of the interesting things about these fields has been the company's strategy in acquiring them. Historically, Vanguard Natural Resources has purchased fields that were in the mature stage of their lives. This means that the fields have passed their point of maximum production, are now seeing their average daily production decline, and Vanguard Natural Resources was able to acquire them for much cheaper than it would have cost if the company bought undeveloped fields. It also has allowed the company to save money in the development stage of the field since it doesn't have to pour in capital to bring the field to its point of maximum production.

Plenty of resources despite field maturity
But just because Vanguard Natural Resources has been buying mature properties does not mean that its fields are out of resources. In fact, quite the opposite is true since a mature field at the end of its life can still have as much as 70-80% of its original resources still in the ground. This has resulted in Vanguard Natural Resources having substantial reserves. The company has proven reserves of 300 million barrels of oil equivalent, or approximately 1.8 trillion cubic feet of natural gas equivalent.

Pinedale acquisition represents departure from strategy
Vanguard Natural Resources departed from this strategy recently when it decided to acquire the Pinedale property in Southwestern Wyoming. This property requires Vanguard Natural Resources to drill 970 wells at the time of acquisition in order to develop it fully. While this is both a departure from the company's historical strategy and represents an enormous new expense for the company, it could ultimately pay off for Vanguard Natural Resources' unitholders.

Strong distribution growth
As Vanguard Natural Resources is primarily an income investment, we need to pay attention to the company's distributions. Fortunately, Vanguard Natural Resources has a long history of returning large amounts of cash to its investors. What's more, Vanguard Natural Resources has been growing its distributions at a fairly impressive rate over the past few years.

Source: Vanguard Natural Resources

As this chart shows, Vanguard Natural Resources has increased its total payout by 48% since 2008. Unfortunately, Vanguard Natural Resources has also increased its unit count over the same period, so individual unitholders haven't seen such a large increase. But the company's unitholders have still seen their distributions increase by 33.3% over the same time period.

Source: Vanguard Natural Resources

Other companies offering similar investment theses
Vanguard Natural Resources is not the only publicly traded LLC that has a lot to offer an income-focused investor. Another company that may be worth looking at is Linn Energy, which has a similar business model and yields 9.30%.

Foolish takeaways
In conclusion, investors that are looking for income from their investments may find a lot to like in publicly traded LLCs. Companies like this offer growth prospects and high distribution yields and could deserve a position in your portfolio.