I have been a huge fan of real estate investment trusts (REITs) and master limited partnerships (MLPs) since I began investing. These tax-advantaged entities avoid paying corporate-level taxes as long as they pass on a certain level of income or fulfill other requirements. #-ad_banner-#There’s certainly been no shortage of interest in these and other income-producing investments over the past few years. But these days, some income-producing investments are looking a little risky. Shares of consumer staples and utility companies are trading at multiples well above their historical averages. Many have been warning of frothiness in the market for junk-rated debt… Read More
I have been a huge fan of real estate investment trusts (REITs) and master limited partnerships (MLPs) since I began investing. These tax-advantaged entities avoid paying corporate-level taxes as long as they pass on a certain level of income or fulfill other requirements. #-ad_banner-#There’s certainly been no shortage of interest in these and other income-producing investments over the past few years. But these days, some income-producing investments are looking a little risky. Shares of consumer staples and utility companies are trading at multiples well above their historical averages. Many have been warning of frothiness in the market for junk-rated debt and bank loans. But even those groups may be a better bet than a new yield structure that recently caught my eye. This new type of income-producing company is getting a lot of attention from dividend investors — but might not be all it’s cracked up to be. The alternative energy industry (such as solar power and hydroelectric) hasn’t been able to use the MLP structure like traditional energy companies. Yield-hungry investors, eager for the income they see in MLPs and the growth in alternative energy, have been disappointed, but the Yieldco has stepped in to fill the gap. (My… Read More