Incentives matter on Wall Street, and far too often the wrong incentives get insiders paid at the expense of investors. But sometimes you can find situations where the interests of shareholders and company management are tightly aligned, producing as close to a win/win for investors as possible. That's one of the big reasons for income investors to like giant, high-yield midstream players Enterprise Products Partners (NYSE: EPD) and Kinder Morgan (NYSE: KMI).

Midstream master limited partnership (MLP) Enterprise Products Partners has insider ownership of roughly 32%, virtually all of which is owned by the family of the partnership's co-founder Dan Duncan. That means that the people who control this energy infrastructure behemoth are collecting nearly one third of the distributions it throws off. Total distributions in 2021 were around $3.93 billion, so a third of that is about $1.3 billion. That's a huge sum of money, and it helps to insulate the hefty 7.6% distribution yield from a downward revision. Indeed, if unitholders take a distribution haircut, so does the Duncan family and other insiders.

Image source: Getty Images.

Continue reading

Source Fool.com