However, price appreciation is much different. If the growth expectations for ATLS remain the same by year five (indicating it deserves to be priced at a 4% yield), an increase of 149% in income from $4 to $10 implies price appreciation of 149%. VNR's price appreciation would be roughly 22% under the same assumptions.

As with all stocks, expectations for future growth, whether it be earnings or distributions, will drive stock prices over time.

Where to Find MLP Distribution Growth

Given what we have outlined above, one method to identify those MLPs that provide the most total return potential is to calculate the implied forward return by adding current yield and distribution growth. While simplistic in its approach, this serves as a good barometer for potential total returns, all else being equal.

This simple analysis reveals something quite interesting. The sector with the lowest current yield, General Partners, provides the highest projected total return at 23.6%. The total return is almost entirely the result of distribution growth.

Investors looking to capitalize on this opportunity can choose to invest in individual MLPs or use broad rules-based exchange-traded funds that focus on distribution growth. For example, the Yorkville High Income Infrastructure ETF (YMLI) has a current yield of 6.3% and average distribution growth of 6.7 % (fourth quarter year-over-year) by having more exposure to general partner and gathering and processing MLPs than its peers.

On the underlying partnership level, MLPs with cash flows that are both stable and growing provide compelling total return potential.

An example is Oneok (OKE), a C-corp MLP general partner with a 2.7% current yield. OKE just spun off its utility business (One Gas (OGS)) and is in the process of exiting its unprofitable energy services segment. For 2014, OKE expects to pay a dividend of $2.13, which represents an increase of 40% versus 2013. The company expects to grow its dividend at a rate of 10% annually for 2015-2016, leaving OKE relatively undervalued in comparison to its peers.

Another interesting example is Energy Transfer Equity (ETE), general partner to Energy Transfer Partners (ETP), Regency Energy Partners (RGP) and Sunoco Logistics Partners (SXL).

As general partner to these three MLPs, ETE benefits exponentially from distribution growth at the underlying MLPs. In 2013, ETE announced its intentions to form a fourth MLP subsidiary to hold its Trunkline LNG export terminal project. ETE also resumed growing its distribution and announced a $1B share repurchase during the year contributing to a total return of +88% in 2013. ETE could have annual distribution growth in the mid teens over the next five years providing an attractive forward return outlook.

At the time of publication the author had positions in the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Darren Schuringa is the managing partner of Yorkville Capital.

If you liked this article you might like

These 5 Stocks Under $10 Could Make You a Lot of Money

These 5 Stocks Under $10 Could Make You a Lot of Money

Vanguard Natural Resources (VNR) Highlighted As Weak On High Volume

Vanguard Natural Resources (VNR) Stock Climbs With Rallying Oil Prices

Vanguard Natural Resources Gets Some Breathing Room With Creditors

Vanguard Natural Resources' Credit Review Breathes New Life Into The MLP

Vanguard Natural Resources' Credit Review Breathes New Life Into The MLP