Energy partnerships are usually considered to be income plays, and rightly so — most have high dividend yields. But investment manager Martin Sosnoff says this little corner of the energy sector is a place for capital gains this year.
But Sosnoff — a money manager for six decades who has written four books, most recently “Train to Outslug the Market” — points to what he sees as a particular opportunity for quick growth in what is ordinarily considered a space for income. If you invest in an MLP outside a tax-deferred retirement account, your taxes become a bit more complicated. The limited-partnership structure provides a tax advantage — instead of a company paying its own income taxes and its shareholders paying taxes on their dividends, the income passes right through the limited partners. The partners can also have their taxable income reduced to reflect their portion of the partnership’s capital outlays and expenses.
As we move closer to a post-pandemic economy, investors are becoming more confident in pipeline operators’ ability to maintain dividends, Sosnoff said. He sees this as a special situation in a particular class of income-oriented investments that presents an opportunity now.
People don't realize how energy industry improves their lives... both cost of energy but also financial contributions.