Income Insights

When the research firm Hedgeye came out with a report blasting a long-time favorite of mine—Kinder Morgan Energy Partners (NYSE: KMP)—my first question was what have they seen that I have not to date? Is there something most of us who research this master limited partnership have overlooked, some critical Achilles heel that could in Hedgeye’s words make Kinder and related companies a “house of cards?”

Similarly, I wondered why Hedgeye had chosen to pick on Kinder, rather than a master limited partnership (MLP) with more obvious troubles such as NuStar Energy (NYSE: NS). The latter, for example, has failed to cover its distribution with distributable cash flow (DCF) for several quarters now, even leaving aside its extremely aggressive capital spending.

Investors shouldn’t automatically assume that dividend-paying equities are inherently safer than tech stocks or other cyclical fare. When an income-oriented stock cuts or eliminates its dividend, investors not only suffer a diminution of income but also a significant loss of principal during the subsequent selloff. Understanding a company’s underlying business and its growth prospects are essential to separating the winners from the losers.

Detroit's recent bankruptcy serves as a reminder of the potential risks in the municipal-bond market. Here are two strategies to insulate your fixed-income portfolio and build wealth over the long haul.

Verizon Communications' (NYSE: VZ) second-quarter results demonstrate why its stock trades at a premium, but investors should wait for a pullback before adding to their positions .

Utility stocks might be due for a pullback, but the risks that rising interest rates pose to the sector are overblown.

What telecom names boast the safest dividends? The industry’s Big Four take the title, hands down. Among the smaller fry, Consolidated Communications (NSDQ: CNSL) is in the best shape--one of the reasons short interest in the stock is lower than its peers that trade with reasonable liquidity. 

The recent pullback in shares of Southern Company (NYSE: SO) represents a buying opportunity.

The pullback in master limited partnerships after the Federal Reserve announced plans to scale back quantitative easing gave investors an opportunity to buy Kinder Morgan Energy Partners LP (NYSE: KMP) at a favorable price.