1 Pipeline Stock to Buy in August for Steady Passive Income
Pipeline stocks remain lucrative for passive income investors.
Overview
Pipeline stocks have long been a favorite among passive income investors. While a bit more complicated in reality, pipeline businesses can be thought of as toll roads for fossil fuels. Companies that drill for oil and gas are considered upstream producers. Downstream producers largely consist of refineries and final distribution channels, such as gas stations.
Pipeline companies are considered midstream producers. That is, they handle fossil fuels after they're produced, but before they're processed and delivered to the final customer.
Details
In general, pipeline infrastructure is difficult to build. These transportation networks can cost billions of dollars, with long construction lead times and numerous regulatory hurdles and permitting requirements. Once built, however, a competing pipeline in the same area usually isn't added until volumes exceed the original pipeline's capacity. In a nutshell, once a pipeline network is established, it often has a monopoly on local fossil fuel transportation.
Source
Originally published at www.fool.com.