{"id":36751,"date":"2023-11-23T13:30:56","date_gmt":"2023-11-23T13:30:56","guid":{"rendered":"https:\/\/microloannexus.com\/investing\/this-8-2-dividend-stock-never-goes-down\/"},"modified":"2023-11-23T13:30:57","modified_gmt":"2023-11-23T13:30:57","slug":"this-8-2-dividend-stock-never-goes-down","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=36751","title":{"rendered":"This 8.2% Dividend Stock Never Goes Down"},"content":{"rendered":"
\n

Seriously. Alerian MLP ETF (AMLP) <\/strong>pays a dividend that is now a sizzling 8.2% (read: eight-point-two<\/em>). Plus, the fund raises its payout regularly. It dishes 12% more today than it did twelve months ago!<\/p>\n

As a result, AMLP is so popular that investors keep the price up!<\/p>\n

Seriously, check out this quarter-ending stock price chart. AMLP\u2019s quote may drift for a quarter, or two, max<\/em>. That\u2019s why any meanderings lower are great buying opportunities:<\/p>\n

AMLP is up 19% since we added it to our Contrarian Income Report<\/em> portfolio just over a year ago. Despite this stellar performance by an income stock, it may indeed be the one missed by most plain-vanilla investors.<\/p>\n

These salad days for AMLP feel like they\u2019ve been going on forever. But it wasn\u2019t always this way. The catalyst for the fund\u2019s consistent dividends has been the energy market, which turned around in a big way in 2020.<\/p>\n

<\/fbs-ad><\/p>\n

Previously, this fund was actually a dog<\/em>. (No offense, Bizzi.) At least for the six-year energy bear market from 2014 to 2020, AMLP ground lower, lower and even lower. Month after month this fund was a big fat loser.<\/p>\n

Yet it wasn\u2019t a bad<\/em> fund. It was simply the wrong time to own AMLP, which holds the stocks of energy infrastructure companies. These are essentially middlepersons<\/em> that collect tolls on energy transport. Yes, they technically make money during all energy seasons but it\u2019s much better to own them when prices are at least<\/em> steady or, better yet, heading higher.<\/p>\n

(Producers like Exxon Mobil (XOM)<\/strong>, on the other hand, are even more<\/em> sensitive to energy prices. We buy them only<\/em> when oil itself is cheap<\/em> and likely to rally.)<\/p>\n

AMLP\u2019s 2014-to-2020 trip lower culminated with a complete<\/em> meltdown in early 2020. In April 2020, crude oil prices crashed, to say the least. They hit negative<\/em> territory, which means producers were paying<\/em> people to take the goo off their hands. Crazy!<\/p>\n

Ironically, this set the stage for a multi-year rally in crude.<\/em><\/p>\n

Out in the oil patch, low prices are the best cure for low prices.<\/em> Producers quickly cut production to save their bottom lines, their dividends, and even their companies. Supply immediately drops off a cliff.<\/p>\n

The thing with supply is that it takes years<\/em> to come back online. Producers can quickly cut shale extractions and bring the offshore rigs back to port, but it takes much longer to ramp back up.<\/p>\n

Long-term (over the ensuing years<\/em>), energy prices stay elevated because of industry underinvestment during fallow times. The result is a sea of rising dividends from the stocks that AMLP owns. Check out this rising quarterly dividend tide. The trend is up and getting better, with a dividend 31% higher over this three-year period:<\/p>\n

As long as energy prices grind sideways or better, AMLP keeps collecting tolls. Which means the dividends continue.<\/p>\n

Some of the individual stocks that AMLP owns pay even more. Top holding Energy Transfer LP (ET)<\/strong> yields 9.3%. But be careful! ET will send you a complicated K-1 tax form\u2014unless you own the stock by owning AMLP.<\/p>\n

My accountant nearly broke up with me years ago when I handed him two K-1s from these types of toll bridges. I thought I was just buying a couple of stocks. To him, I had joined two partnerships. Messy.<\/p>\n

Never again, I promised him. Which is why we like AMLP. No K-1!<\/p>\n

Plus, diversification. We\u2019re not looking to walk the Permian basin here looking for deals, inspecting pipelines. Give us a ticker that we can time and we\u2019re good to go.<\/p>\n

Most mainstream investors (and money managers, for that matter) stop at Energy Select Sector SPDR Fund (XLE)<\/strong>. There are a couple of problems with this approach. First, XLE owns the Exxons of the world, which makes it more<\/em> dependent on rising energy prices.<\/p>\n

We dividend investors don\u2019t need the rollercoaster. Pipelines suffice, sans the K-1.<\/p>\n

Second, XLE only pays 3.2%. Lame! We\u2019ll never retire on dividends this way.<\/p>\n

Before I let you go, let me tell you about something better than an 8.2% yield. That would be a 10.2% dividend.<\/p>\n

This final twist is for my closed-end fund (CEF) diehards who worry I\u2019ve gone soft recommending ETF AMLP. Kayne Anderson Energy Infrastructure (KYN)<\/strong> owns many of the same names as AMLP\u2014but mainstream investors don\u2019t know about it. Which means it\u2019s cheaper, and it pays more!<\/p>\n

KYN yields 10.2% today and\u2014get this\u2014it trades nearly $2 below<\/em> its net asset value (NAV):<\/p>\n

It\u2019s basically a $10 stock trading for $8\u2014eighty-one cents on the dollar to be precise. On sale!<\/p>\n

Brett Owens is chief investment strategist for <\/em>Contrarian Outlook<\/em>. For more great income ideas, get your free copy his latest special report: <\/em>Your Early Retirement Portfolio: Huge Dividends\u2014Every Month\u2014Forever.<\/p>\n

Disclosure: none<\/em><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Seriously. Alerian MLP ETF (AMLP) pays a dividend that is now a sizzling 8.2% (read: eight-point-two). Plus, the fund raises its payout regularly. It dishes 12% more today than it did twelve months ago! As a result, AMLP is so popular that investors keep the price up! Seriously, check out this quarter-ending stock price chart.<\/p>\n","protected":false},"author":1,"featured_media":36752,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-36751","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nThis 8.2% Dividend Stock Never Goes Down | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"Seriously. Alerian MLP ETF (AMLP) pays a dividend that is now a sizzling 8.2% (read: eight-point-two). Plus, the fund raises its payout regularly. 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