An Energy Play for Dividend Investors: NGP Capital Resources

NGP Capital Resources Company (NGPC) is a Business Development Company (BDC) specializing in the energy sector. It provides financing to a variety of small energy companies -- primarily oil and gas producers, but also coal mining companies and energy infrastructure companies. Its assets consist primarily of debt instruments, of which a large proportion are secured. However, it also has royalty interests and equity interests which constitute roughly 15% of the fair value of its investment portfolio. Its cash holdings exceed its debt by roughly $46 million, so that it is not one of those BDCs that could be described as being under the shadow of "lender problems" or ratio issues.NGPC closed Monday at $9.85 per share, which represents a significant discount from its $11.01 a share book value... more

5 Rules for Choosing High-Yield, Low-Volatility Income ETFs

The recent spike in oil prices has many investors believing that inflation is coming and the bond bubble has finally popped. However, investors should have a predetermined asset allocation strategy and re-balance their portfolio on a periodic basis, regardless of what's hot or not. ETFs give you an easy way to build a diversified portfolio. Below are 5 rules to select income ETFs without taking on too much risk or volatility: 1. Twelve-Month-Yield Greater Than 4.5%: With 10-year U.S. treasure at 3.5%, you want extra yield to compensate risk. 2. ETF’s Net Assets Greater than $400 Million: This is not a scientific number. I just like to select ETFs from the largest 200 ETFs. In general, ETFs with large net assets have high liquidity, low ask-bid spread and low fee. Below are 12 such ETFs... more

32 Yield-Boosting, Volatility-Reducing Utility Dividend Stocks

I previously wrote an article... more

Adding American Vices to Your Dividend and Growth Portfolios

The price of everything has been skyrocketing recently and there is going to come a point where consumers are going to be unable to keep up. Even if unemployment continues to improve, the American consumer is going to be stressed paying $4 for a gallon of gas. Of course, these factors and all of the chaos overseas could lead to an ever volatile market; the VIX has crossed over 20 several times in the last 2 weeks. That is why is it is a good time to load up on vices that the American consumer cannot do without and will pay outrageous prices for. There are the essentials; like oil, eggs, and medicine that people need on an everyday basis, but I’d rather look at non-essentials that are so price-inelastic that their consumption defy the laws economics and general health. The American... more

Chimera: Protecting a High Yield Stock From Market Risk Using Options

A number of investors are looking for income through high yield with relative market risk safety. That is often a difficult combination to achieve. Companies that qualify as real estate investment trusts (REITs) are good income producers, but they are not immune from market and / or interest rate risk. The use of options to assist us as a tool in the decision to invest is akin to the use of a hammer and nails in constructing a structure. Often for us, the ability to apply option trading techniques is the difference between a viable and non-viable trade or investment. It is almost always a key component of our strategy to control risk in any trade, because controlling risk is the cornerstone of successful investing. Chimera Investment Corporation is one REIT which pays a quarterly dividend... more

Dividend Champions: Focus on Healthcare

The Dividend Champions spreadsheet and PDF have been updated through 2/28/11 and are available at here. N ote that all references to Champions mean companies that have paid higher dividends for at least 25 straight years; Contenders have streaks of 10-24 years; Challengers have streaks of 5-9 years. Together, all of these companies may be referred to using the abbreviation “CCC.” This is the fifth in a series of articles focusing on specific industries and isolating the CCC companies within those industries. The first four can be found under my articles page, beginning on March 2. More than Drugs The importance of Health Care companies is becoming... more

Looking for Emerging Market Yield? Consider These 3 Telecom Giants

As the turmoil in the Middle East spreads, many investors have fled a number of market sectors for the safe havens of gold and silver in order to wait out the storm. Arguably, no one sector has been more impacted than the emerging markets which have seen tremendous outflows thanks to a broad flight to quality by numerous investors around the globe. While this exodus may be warranted in some cases, one has to wonder if the sell-off has been a little overdone, impacting not only the in-focus Middle East region, but a number of markets in the Asia-Pacific corner as well as in Latin America as well. This has helped to push down emerging market PE ratios to unbelievably low levels making a great value proposition for investors willing to stick it out for the long haul. While a number of... more

Dividend Scan: SSL, MDC, CSE, WMT, PNY, MYE, CNAF

The US market slipped to a negative territory as oil prices crossed $105 per barrel mark. Amid market's negative move, several companies declared their annual and quarterly dividends. Some notable dividend payers are discussed here. Sasol Ltd (NYSE: SSL) gained 1.11 percent or $0.62 to $56.55 as it raised its first-half dividend by 11 percent to 45 cents per share. MDC Holdings Inc (NYSE: MDC) declared a 7.7 percent increase in its cash dividend to $0.14 per share from $0.13 a share, payable on April 8, 2011 to shareholders of record on March 17, 2011. MDC gained 1.08 percent or $0.27 to $25.26 after the news. CapitalSource Inc (NYSE: CSE) announced a quarterly cash dividend of $0.01 per share, payable on March 31, 2011 to shareholders of record on March 16, 2011. CSE added 0.54... more

Euro Oils Pay High Dividends From Global Profits

Summary and Recommendation Buy recommendations Total (TOT), Statoil (STO) and Royal Dutch Shell (RDS-A) offer the highest current dividend yields in our large cap coverage supported by growing global businesses, strong financial positions and high rates of cash flow generation. McDep Ratios are among the lowest at 0.59, 0.64 and 0.77 respectively. Oil production is the most important contributor to present value at 67%, 63% and 55%. Strong demand with expanding economic activity and difficulties in expanding supply combine to keep oil price in an uptrend with six-year futures at $100 a barrel compared to the 40-week average of $88. Dividends were sustained handily during the financial panic of 2008 and its aftermath in part because financial strength is high as measured by low ratios of... more

Dividend Stocks Showing Investors The Money

Investors realize return on investment in the form of dividends, capital gains or a mix of both. Stocks that pay dividends typically deliver on average total long term returns that are characteristic of equities in general. The main characteristic that differentiates dividend paying stocks is that the dividend payment provides some stability in the total returns that investors are expected to receive in a given year. This lowers volatility and ensures that investors generate a relatively predictable return that could be used to fund retirement needs. Investors relying on dividends for their retirement income should also look at companies that regularly grow distributions, as a hedge against inflation. Wal-Mart Stores, Inc. (WMT) operates retail stores in various formats worldwide. The... more