3 Monthly Dividend Stocks to Buy Today


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Investors no longer have to wait three months between dividend checks thanks to Vanguard Natural Resources, BreitBurn Energy Partners and Enerplus.

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  • http://files.shareholder.com/downloads/BBEP/3327839101x0x765332/3b27b88c-bd05-4ba6-8e41-00dfc06bc4e8/Breitburn_Presentation%206.25.14.pdf
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  • 3 Monthly Dividend Stocks to Buy Today

    1. 1. 3 Monthly Dividend Stocks to Buy Today
    2. 2. One of the challenges of using the stock market for income is balancing the quarterly dividend payments. In order to avoid a lean month each quarter, investors might buy a stock that is not a perfect fit for their portfolio or risk tolerance. Photo credit: Flickr/Monochrome
    3. 3. To counteract that we’re beginning to see more companies pay monthly dividends. These high yielding companies have listened to investors who have said they want to smooth out their cash flow. Photo credit: Flickr/Ervins Strauhmanis
    4. 4. Many of the top monthly dividend payers reside in the energy sector. These companies are using the strong cash flow from oil and gas wells to fuel excellent monthly dividend payments to their investors. Photo credit: Flickr/Kool Cats Photography
    5. 5. Three of the best monthly divided payers from the energy sector are BreitBurn Energy Partners, Vanguard Natural Resources and Enerplus. Let’s take a closer look at what makes these great monthly dividend stocks to own.
    6. 6. BreitBurn Energy Partners • Proved reserves of 214.3 million BOE. • Reserves are liquids weighted at 60% of total. NASDAQ: BBEP Photo credit: Flickr/Kool Cats Photography
    7. 7. BreitBurn Energy Partners • Owns long-lived oil and gas properties with a more than 15 year reserve life. • Liquids weighted reserves at 60% of total reserves. NASDAQ: BBEP Photo credit: Flickr/Kool Cats Photography Source: Breitburn Energy Partners Investor Presentation
    8. 8. BreitBurn Energy Partners BreitBurn Energy Partners has undertaken a strategic shift toward liquids in recent years. Source: Breitburn Energy Partners Investor Presentation
    9. 9. BreitBurn Energy Partners Why I like its current dividend:  Strong MLP asset base filled with low-decline oil and gas properties.  Effective hedging strategy to mitigate commodity price volatility and stabilize its cash flows.  After four years of consistent distribution growth BreitBurn now yields 9.15%.
    10. 10. BreitBurn Energy Partners Keys to keep the income growing:  Solid organic drilling program is focused on high- margin oil properties.  History of acquiring solid producing properties.  Last year BreitBurn targeted $500 million in acquisitions, but it completed $1.2 billion worth of deals.  This year it’s targeting $600 million in acquisitions.
    11. 11. Vanguard Natural Resources • Proved reserves of 300 million BOE. • Reserves are gas weighted at 66%. NASDAQ: VNR Photo credit: Flickr/Wyoming: Upper Green River Valley
    12. 12. Vanguard Natural Resources • Proved reserves of 300 million BOE. • Reserves are gas weighted at 66%. NASDAQ: VNR Source: Vanguard Natural Resources Investor Presentation
    13. 13. Vanguard Natural Resources Vanguard Natural Resources’ reserve shift has taken it in the opposite direction of BreitBurn Energy Partners. Source: Vanguard Natural Resources Investor Presentation
    14. 14. Vanguard Natural Resources Why I like its current dividend:  Like Breitburn it has a strong MLP asset base and it also hedges its commodity price exposure.  However, Vanguard Natural Resources does not outspend its cash flow to drill new wells and its committed to a 3.0x Debt/EBITDA ratio.  Vanguard has grown its distribution 48% since its IPO and currently yields 8%.
    15. 15. Vanguard Natural Resources Keys to keep the income growing:  Recent acquisition in the Pinedale/Jonah Field signals a strategy shift toward low-risk growth drilling.  However, the bulk of its growth will come from acquiring solid producing properties.  Vanguard has acquired $3.4 billion of assets since its IPO and has been taking advantage of cheap natural gas prices to load up on gas assets.
    16. 16. Enerplus • Proved reserves of 406 million BOE. • Reserves are balanced at 51% liquids and 49% natural gas. NYSE: ERF Photo credit: Enerplus
    17. 17. Enerplus • Proved reserves of 406 million BOE. • Reserves are balanced at 51% liquids and 49% natural gas. NYSE: ERF Source: Enerplus Investor Presentation
    18. 18. Enerplus Enerplus’ strategy shift has see its focus on growing production from shale. Source: Enerplus Investor Presentation
    19. 19. Enerplus Why I like its current dividend:  Base production from low-decline Canadian waterfloods and Canadian natural gas supports the dividend.  Growth from shale adds upside.  Enerplus’ adjusted payout ratio has fallen from 212% in 2011 to 113% this year, while its simple payout ratio has gone from 59% to 24% over that same timeframe. This is making its dividend much more secure.  Enerplus currently yields 4.27%, but its shale fueled growth could send that payout higher in the years ahead.
    20. 20. Enerplus Keys to keep the income growing:  Shale fueled growth is the key to Enerplus’ future.  Recently announced that it has 250% more oil in the Bakken than it previously estimated.  Canada’s Duvernay Shale is a potentially massive resource base that could fuel more upside to investors.
    21. 21. Investor takeaway Energy fueled monthly dividends can come in all shapes and sizes. BreitBurn’s payout is fueled by oil, Vanguard’s is fueled by natural gas and Enerplus’ is fueled by shale. That gives investors more choice in which cash cow they want to use to smooth out monthly cash flows rather than adding a less than ideal candidate to their income portfolio. Source: Enerplus
    22. 22. Our free report on the market’s best dividend stocks.