Compensating for that risk, however, are double-digit yields and generally aggressive business plans that offer strong potential for robust dividend growth. And all of our picks are also battle-hardened, tested to withstand all but the worst possible macro conditions.

The primary areas of focus are assets that rely mainly on fee-based income and mostly operate in the energy business. But there’s also commodity exposure that can rev up growth as the global economy regains strength in coming months.

We started this group with Teekay LNG Partners (NYSE: TGP), one of the leaders in global shipping of liquefied natural gas (LNG). This business has substantial upside in coming years as Asia and Europe import ever-more gas by ship. And it could take a giant leap forward as the US shifts its LNG infrastructure from the current import focus to one with export potential for the huge potential reserves of shale gas on these shores.

Yielding over 11 percent and with its payout well covered by cash flow, Teekay LNG Partners remains a strong buy up to 20.

This week, Teekay is being joined by a nice pair: DCP Midstream Partners (NYSE: DPM) and the closed-end Kayne Anderson Energy Total Return Fund (NYSE: KYE). Both also yield well in double-digits, DCP 12.5 percent, Kayne Anderson 11 percent. At least equally important, they’re both positioned for strong future growth and protected against near-term economic risk.

DCP is lucky enough to have the support of a general partner that’s in turn backed by two extremely solid owners, pipeline giant Spectra Energy (NYSE: SE) and Super Oil ConocoPhillips (NYSE: COP). Both owners of the general partner (GP) are strongly incentivized to help the limited partnership (LP) DCP pass along the maximum amount of cash to both general partners and limited partners, which adds up to a generous distribution for investors. And with first quarter distributable cash flow covering the payout by a huge 1.4-to-1 margin, there’s plenty of safety built in as well as growth potential.

DCP’s primary business is gathering, processing, transporting and marketing natural gas and natural gas liquids. These are all to a large extent fee-based businesses, as are the LP’s wholesale propane distribution operations. Unlike pipelines and storage, however, they’re affected by commodity prices in terms of both system throughput and the price spreads that determine profit margins.

Success in these businesses depends to a large extent on management acumen in balancing these various risks. That means sometimes hedging directly with a variety of means, but above all it means limiting leverage to ensure against meltdowns when conditions turn decidedly sour and there’s nowhere to hide.

Problems with certain assets, some due to storm damage, and lower throughput in the natural gas liquids business were challenges in the first quarter for DCP. Meanwhile, it increased the number of outstanding units by 13.3 percent to fund acquisitions, diluting distributable cash flow per share by an equal amount.

This, however, was offset by strength in the natural gas services division (53 percent of adjusted gross margin), which posted a 7.4 percent boost in profitability as the LP successfully absorbed acquisitions. And margins at the wholesale propane distribution unit rose by a factor of 4.5-to-1 on a 9 percent increase in volumes and cost controls.

All three of DCP’s main business lines, of course, could be affected by further US economic weakness. Propane distribution profits depend heavily on weather as well as how well DCP controls its risk to volatile natural gas prices and whether it can pass volatile costs directly onto customers without losing their business.

Gas services’ margins are also affected by price swings and the level of economic growth. Ironically, natural gas liquids should benefit from the huge increase in the price spread between natural gas and oil. But it’s also the smallest operation with the least impact on bottom line cash flow.

Concerns that any or all of these businesses could come unglued is the single biggest reason why DCP units are still more than a third off their 52-week highs and sell for just 1.67 times book value and 52 percent of annual sales. But with steady revenue, modest leverage ratios, strong distribution coverage and no major financing needs until at least June 2012, the LP is surprising many with its resiliency.

Moreover, it’s even continuing to expand its base of profitable assets in these difficult times, with a new $56 million gas gathering pipeline going into service last month in east Texas. The LP was able to secure an additional 25.1 percent of the venture from its general partner, which in turn will be able to use the LP’s structure to garner more cash from the asset.

This is the kind of deal an LP with strong sponsorship can do, and an avenue to growth that’s simply closed to independents. We look for much more of the same for this well-run outfit. Buy DCP Midstream Partners up to 22.

For more information on DCP Midstream Partners, go to http://www.dcppartners.com/ or call its Denver office at 303-633-2900.

As a closed-end mutual fund, Kayne Anderson provides an easy way for investors to hold master limited partnerships (MLP) in an IRA or other tax deferred retirement account. That’s because there are no Form K-1 filings or UBTI (unrelated business taxable income) to deal with.

In the past, we’ve recommended vehicles run by Tortoise Capital Advisors for fund investors. We’ve picked Kayne Anderson Energy Total Return Fund over them here because of its slightly more inclusive nature.

The focus of the fund’s portfolio is overwhelmingly on MLP units, with a provision in the charter to hold no less than half total assets in them. But there are also holdings of other top quality high yield flow through entities, such as Canadian trusts.

The fund recently held 12 percent of its portfolio in Canadian securities and smaller amounts in maritime nations such as the Bahamas and Greece. The fund holds bonds (23 percent at last count) and leverage was modest and balanced by a 6 percent cash position at last count.

MLP prices are the single biggest influence on the fund’s share price, and 2008 was an ugly year to say the least. The fund’s portfolio value actually fell by more than half, with all of the loss and then some coming after the fall of Lehman Brothers in September.

This year, fortunately, has been a far different story. With MLPs and other flow-through entities surging, the value of the portfolio has actually risen by more than 50 percent, with the lion’s share of the gain coming after the overall market’s early March lows. The fund’s market price is nearly double from those lows, though it’s still only a little more than half the levels that Kayne consistently held up until late 2008.

That extremely volatile price performance is a big reason why this fund belongs in our Growth segment of MLP investments with moderate risk and potentially greater upside than the Conservative group. Underneath, however, investors can take great comfort in knowing distributions have been consistently increased and are likely to continue rising going forward.

On June 17, for example, management increased the fund’s distribution guidance for 2009 by a solid 4.4 percent to a quarterly rate of 48 cents a share. The boost was spurred simply by management’s acumen in buying and holding only the best MLPs and other high-yielding investments while avoiding real blowups. And it’s up from the fund’s prior distribution guidance for 2009 of just 44 to 46 cents per share per quarter.

As for taxation, some 50 percent of the fund’s distribution is anticipated to be tax-deferred return of capital. That’s vastly superior to most income fund alternatives, again despite the diversified nature of Kayne’s portfolio.

As with all of the best closed-end funds that pay big yields and hold MLPs, Kayne Anderson does trade at a rather sizeable premium to its net asset value. The level of 17.7 percent effectively means you’ll pay $117.70 for every $100 of assets based on tradable market value when you buy the fund.

That, however, is well in line with the premiums commanded by other closed-end funds holding MLPs, notably those in the Tortoise family. And given the high yield and the fact that its holdings are vastly undervalued, it’s not nearly as high a price to pay as it seems at first blush.

According to information released earlier this month, the fund’s largest current holding is a 12 percent position in Kinder Morgan Management (NYSE: KMR), an affiliate of charter Portfolio member Kinder Morgan Energy Partners (NYSE: KMP). Other holdings include Conservative Holding Enterprise Products Partners (NYSE: EPD) and recently added Aggressive Holding Navios Maritime Partners (NYSE: NMM).

Midstream energy holdings are the primary focus. But there are also upstream outfits (oil and gas producers), coal producing partnerships and shipping companies. The upshot: Buying Kayne Anderson gives investors simultaneous exposure to a range of MLPs that meet the criteria for MLP Profits Growth Holdings, which should be a very profitable proposition in coming months.

Buy Kayne Anderson Energy Total Return Fund up to 20.

To contact Kayne Anderson Energy Total Return Fund, go to http://www.kaynefunds.com/ or phone its Los Angeles office at 800-231-7414.