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Top Picks 2018: MPLX Could Give Yield-Seekers a Boost

Domestic energy infrastructure could benefit from more favorable tailwinds, both politically and structurally, this year.

Following a soft year of performance in 2017, I’m upping my exposure to domestic energy infrastructure where there are more favorable tailwinds, both politically and structurally, explains Bryan Perry, editor of Cash Machine.

MPLX LP (MLPX) is an MLP formed out of Marathon Petroleum (MPO) an extremely well-run company engaged in refining, marketing, retailing and transporting petroleum products primarily in the U.S. My top conservative pick for 2018, the stock offers a current dividend yield of 6.3%.

Like many oil and gas companies, there are numerous tax advantages to carving out the most capital-intensive infrastructure assets of total operations that provide a home for future acquisitions and properties of the same structure.

MPLX LP owns, operates, develops and acquires midstream energy infrastructure assets. As of December 31, 2015, the company’s assets included approximately 2,900 miles of crude oil and refined product pipelines across nine states.

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The partnership is in the midst of a period of strong distribution growth that should fuel increased income and capital gains. The partnership forecast a double-digit distribution growth rate for 2018. Energy MLPs lagged in 2017, but in my view will lead in 2018.

Bryan Perry is editor of Cash Machine.

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