This High-Dividend Stock Now Yields 9.8%

Pipelines gush dividends. They require little in the way of labor or maintenance. Ongoing costs are only a fraction of revenue. Many of these stocks pay out yields of five or seven percent, even 10%. They’re safe, too. Sure, oil prices can make huge swings. The total volume of crude moving through pipelines, though, stays remarkably consistent from year to year. As a result, pipeline profits are steady, like bond coupons. Finally, they’re tax-efficient. Many pipeline owners structure their businesses as master limited partnerships, which allows them to avoid paying any taxes on profits. In exchange for this benefit, however, they must pass on almost all of their income to unitholders. All and all, you could do worse than these high dividend stocks for retirement income...

For those searching for a fast, “one-click” solution, I would look into Alerian MLP (NYSEMKT:AMLP). This exchange-traded fund owns a basket of investment-grade pipelines, including top names like Phillips 66 Partners LP (NYSE:PSX), Shell Midstream Partners LP (NYSE:SHLX), and Sunoco Logistics Partners L.P. (NYSE:SXL). Right now, this fund pays a quarterly distribution of $0.23 per unit, which comes out to an annual yield of 9.8%. I expect that payout to grow in the years to come, as surging output from shale fields will require more infrastructure. Firms that move, store, and process all of these barrels could make a fortune.

Source: Income Investor

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