The Global X MLP ETF Is Offering a 7.8% Annual Dividend. But Is the Stock Really a No-Brainer Buy?

The Global X MLP ETF (MLPA 0.07%) boasts a trailing dividend yield of 7.8% and provides passive income-seeking investors with a compelling way to secure quarterly income. The ETF invests in master limited partnerships (MLPs) operating in the midstream pipelines and storage facilities industries. MLPs don't pay corporate taxes, so they pass on more of their income to investors in the form of distributions. As such, the ETF's management claims that the 20 MLPs it invests in "have less sensitivity to energy prices." For reference, the ETF also invests in its sister ETF, the Global X MLP & Energy Infrastructure ETF, which also holds gas pipelines and storage companies, as well as midstream energy infrastructure companies.