3 Underfollowed Dividend-Paying Stocks for Your Watchlist
Jun 21st 2013 2:17PM
Updated Jun 21st 2013 2:18PM
There are a lot of solid dividend-paying stocks to choose from these days. If you are on the lookout for names not on everyone else's radars, here are three companies that should be on your list. All three are midstream MLPs that offer income-seeking investors more than just income.
The natural resource sector is one of the best places to find dividend-paying stocks these days. One company that's caught my eye is master limited partnership PVR Partners and its 8% distribution. PVR Partners is a bit unique in that it not only owns traditional MLP-type midstream assets like pipelines and processing plants, but it also owns and manages coal and other natural resource properties, which you can see in the map below. The company doesn't actually mine the coal; instead, it leases its reserves to others and collects a royalty. Add that model to its midstream business and the result is a company that generates great cash flow to fund its distribution. That's why this businesses is one that you should get on your watchlist.
Source: PVR Partners investor presentation (link opens a PDF)
- Add PVR Partners to My Watchlist.
With operations that include a natural gas storage business as well as natural gas liquids assets, Inergy is another MLP to consider if you are on the lookout for a dividend-paying stock. There are a lot of moving parts with this company, which makes it an interesting stock to watch. The company, along with its affiliate Inergy Midstream , is in the process of merging with Crestwood Midstream Partners to create a company boasting increased size, scale, and diversity, as you can see below. Once the transformational transaction is complete, the company can pursue its opportunity-rich organic growth projects which should drive both returns and income growth for investors.
- Add Inergy to My Watchlist.
The final stock to get on your dividend watchlist is Genesis Energy. The company's business is split between pipeline transportation, refinery services, and supply and logistics, as you can see on the slide below. In addition to the assets it already has on the books, Genesis has a number of projects in the pipeline to drive future growth. Genesis estimates that these projects will enable it to provide distribution growth to investors in the low double digits well into the future. Genesis has quite the history to back those estimates up as the company has 31 consecutive quarters of distribution increases, including 26 which were more than 10%. That's what makes this dividend-paying stock one to watch.
- Add Genesis Energy to My Watchlist.
Foolish bottom line
There's a lot more to each story but the main theme here is that each company has a unique position as a smaller player in the growing midstream industry. All three provide a valuable link in the chain and, as you can see especially with Inergy, merging with other operators could be in the future for any company on this list. Best of all, each company pays a generous distribution to investors. If you're looking for income that others might be missing, these three stocks are worth a closer look.
If, on the other hand, you'd rather get your income from the same fountain as many other investors, Enterprise Products Partners is a name to know. The company can profit no matter the price of natural gas because it has a very diversified set of assets spread across the country. To learn more about Enterprise Products Partners and its opportunities, click here now to check out The Motley Fool's brand-new premium research report on the company.
The article 3 Underfollowed Dividend-Paying Stocks for Your Watchlist originally appeared on Fool.com.Fool contributor Matt DiLallo owns shares of Enterprise Products Partners L.P. The Motley Fool recommends Enterprise Products Partners L.P. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.