Investors Only: Enbridge Energy Partners, Master Limited Partnerships

Someone asked about Enbridge "paying seven percent."

Enbridge (ENB) does not pay seven percent. Enbridge Energy Partners, LLC, (EEP) yields 7.5 percent. So be careful which one you are looking at.

A couple of recent links discuss EEP and other master limited partnerships:

• Top 10 dividend payers in the commodities sector, SeekingAlpha.com
• Enbridge and Kinder Morgan, Seeking Alpha. com

I don't follow Kinder Morgan very closely, although in the past I have posted about Kinder Morgan, and although I can't remember what I posted, I do remember telling myself that to diversity within the industry, I would split any investments in this area into EEP and KMP (again be careful to note exactly which entity you are considering when looking at these family of investments. It can get confusing.).

I have favored EEP only because I see Enbridge everywhere up here in the Bakken and have posted several photos on the blog. It's hard for me to believe that Enbridge won't continue to grow. There will be competition between rail and pipeline, but again, it's hard for me to believe that rail would overtake pipeline in preference. But they certainly are putting in lots of crude-by-rail oil loading facilities in the area.

I used to read articles about difficulty figuring taxes when it came to master limited partnerships, but it's been my experience that the industry has come a long way in simplifying things, but the tax consequences and calculations are much different than non-MLP equities. This is a recent link regarding taxes and the companies noted above.