Drilling for oil and natural gas is a capital-intensive proposition. It takes plenty of specialized equipment to get the job done. And because of that, many E&P firms’ profits don’t always reflect the higher price for energy. But what if you could eliminate that capital cost? Well, that’s just what our latest Best High-Yield Dividend Stocks Model Portfolio pick has done for nearly twenty years.
Our pick is one of the largest owners of acreage across key and prolific natural gas-producing regions. However, the firm does not actually drill for energy; it simply “rents’’ its acreage to other firms and collects a check based on that production. It’s a low capital business that eliminates many of the headaches associated with actual energy production.
The end result for investors has been a steady diet of cash flow.
And since our pick is considered a master limited partnership (MLP), that cash flows back to investors’ wallets as high dividends. Currently, our pick is paying nearly 10% and recently hiked its payout by 21% in the high energy price market. In the end, our pick remains an interesting play on the sector.
In addition to our royalty firm, we’ve added a midstream pipeline stock and removed a property REIT and power producer.
You can check out the Best High Dividend Stocks Model Portfolio to explore all the stocks.
