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Natural Gas Energy Stocks with High Dividend Yields

As the price of a barrel of oil continues to trade around $100 per barrel, the price of natural gas has plummeted like a rock.  Natural gas is currently trading
at $2.33 million BTUs (British Thermal Units).  Usually, the price of gas to oil is 6:1 but with natural gas trading at $2.33 and oil around $100 the ratio is
43:1.  Natural gas hasn’t been this cheap since 2002.  The best trade on natural gas today is to buy cheap assets and wait until their value increases. The natural gas companies have dropped in price along with the market price of natural gas.  However, you will be confronted with an uncertain amount of time for natural gas market prices to increase to normal price levels.   You will want to find natural gas stocks that pay you dividends while waiting on the natural gas price rebound.  These include the high yield natural gas storage stcoks and royalty trusts like discussed below.

PAA Natural Gas Storage (PNG) is engaged in acquiring, developing, operating and commercializing management of natural gas storage facilities to a mix of customers, including local gas distribution companies, electric utilities, pipelines, direct industrial users, electric power generators, marketers, producers, liquefied natural gas importers and affiliates of such entities.  As of Dec 31, 2010, it owned and operated tow natural gas storage facilities in Louisiana and Michigan that have an aggregate working gas storage capacity of 50.00 billion cubic feet and an aggregate peak injection and withdrawal capacity of 1.70 billion cubic feet per day and 3.20 billion cubic feet per day, respectively.  On January 10, 2012,  PNG announced its quarterly cash distribution of $0.3575 per unit  ($1.43 per unit on an annualized basis) on all of its outstanding common and Series A subordinated units.  The distribution will be payable on February 14, 2012, to holders of record of such units at the close of business on February 3, 2012.  This distribution is equal to the quarterly distribution paid in November 2011, and represents an increase of approximately 3.6% over the quarterly distribution of $0.345 per unit ($1.38 per unit on an annualized basis) paid in February 2011.  PNG has an annualized dividend yield of 7.73%.

Niska Gas Storage Partners (NSK) owns and operates natural gas storage assets.  It stores natural gas for a range of customers, such as financial institutions, marketers, pipelines, power generators, utilities and producers of natural gas.  NKA provides storage services under long-term firm contracts, whereby customers pay monthly reservation fees in exchange for the right to inject, store and withdraw volumes of natural gas on days and for periods selected by them. NKA also provides services under short-term firm contracts, whereby customer pays a fixed fee to inject certain quantity of natural gas on a specified date or dates and to store that gas in its storage facilities until withdrawal.  NKA has a dividend yield of 14%.

Pengrowth Energy is a Canadian resource company that is engaged in the production, development, exploration and acquisition of oil and natural gas assets. As of Dec 31, 2010, total gross proved reserves for light and medium oil consisted of 80,746 thousands of barrels (“Mbbl”), heavy oil consisted of 15,138 Mbbl, natural gas liquids consisted of 20,726 Mbbl, natural gas consisted of 531,374 millions of cubic feet (“MMcf”) and coal bed methane consisted of 48,262 MMcf.  At the close of trading January 23, PGH stock was at $10.61 per share on daily volume of 1,005,854 shares.  PGH’s 52-week price range stood at $7.99 to $14.60, which had its $10.61 closing quote off its 52-week high by about 27.3%.  PGH announced its February 15, 2012 cash dividend will be C$0.07 per common share.  This is an annual dividend yield of 7.83% paid on a monthly basis.

 

Quality Stocks with High Yield Dividends

With so investors seeking high yield, it’s important for income investors to find dependable high yield dividend payers that they can count on.  With projections for a slower growth economy amid historically low  interest rates, it’s now more important than ever to find these solid dividend paying companies as there are fewer places to turn to for high yielding investments without taking on unwelcomed risk.  By screening for stocks with market beating yields, double digit growth rates, above median increasing cash flows and a strong balance sheet, this screen seeks to do just that by finding those companies that could turn into long-term core holdings for an income producing portfolio.  And with a Zacks Recommendation of a Buy or at least a Hold, these stocks have the potential to become total return winners as well.

Dividend paying stocks can help you build out a well diversified portfolio.  And if projections for a slower growth economy come true, the investment vehicles with ‘something extra’, i.e., solid and dependable dividends, will become even more highly sought after as investors seek out the best total returns while keeping a watchful eye on risk.

This list is filled with high yield stocks, many above 10%, that are ranked buy or hold by Zachs Investment Research.  Some of the popular names include: FUN that is being recommenmded by Jim Cramer; FSC & MAIN that are monthly dividend payers, CXS & PMT that offer mortgage REIT yields; and several energy stocks for continuing dividends.  The table belows displays the list of high yield dividend stocks.

high yield dividend stock with high quality ratings

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