But in exchange for special tax treatment from the government, an MLP is required to pay out nearly all of its net earnings as distributions to its unitholders. An MLP's units are a lot like an ordinary company's shares of stock, just like its distribution is a lot like an ordinary company's dividend. See, AmeriGas and Ferrellgas are both structured as master limited partnerships, or MLPs. I'm talking about the quarterly distribution to unitholders that is similar to a dividend from other companies. No, I'm not talking about propane distribution - although that's what both AmeriGas and Ferrellgas do: distribute propane as opposed to refining it. Propane is great for heating up steaks, but will it burn your portfolio? Image source: Getty Images.
A man holds tongs over steaks on an outdoor propane grill
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