Getting Paid to Beat the Market: Top Indexes by Dividend Yield
* By the tickerspy.com Staff
* On Monday July 20, 2009, 9:47 am EDT
*
Buzz up! 4
* Print
*
Companies:
o American capital agency corp.
o Enterprise products partners lp
o Babcock & brown air limited
Ownership really pays off in these high-yielding sectors.
Related Quotes
Symbol Price Change
AGNC 22.45 +0.43
Chart for American Capital Agency Corp.
EPD 27.90 -0.05
Chart for ENTERPRISE PT UTS
FLY 7.24 -0.01
Chart for BABCOCK & BROWN AIR
GLS 4.73 +0.01
Chart for GENESIS LEASE LIMITE
MPW 6.81 +0.22
Chart for MEDICL PROP TRST, IN
NS 55.17 +0.17
Chart for NUSTAR ENERGY L.P.
WMZ 18.36 +0.38
Chart for WILLIAMS PIPELINE LP
{"s" : "agnc,epd,fly,gls,mpw,ns,wmz","k" : "c10,l10,p20,t10","o" : "","j" : ""}
A lot of stocks became solid dividend plays when the bottom fell out of the market, as the payout to share value ratio grew. Even as some companies were forced to trim or eliminate payouts, some of the highest-yielding sectors from before the economic downturn are now even more attractive on the basis of yield.
Master limited partnerships, more commonly known as MLPs are specially structured corporations that avoid tax expenses by distributing the majority of their cash flow to shareholders. Thus it is no surprise that the MLPs Index is the top equity Index by dividend yield, currently averaging 9.1%.
To become an MLP, 90% of a company's income must be driven by activities involved with the production or transportation of natural resources or commodities. In rare cases, a significant real estate interest is enough to qualify. The MLPs Index is ahead of the S&P 500 by 5% over the last month, but the low-beta stocks generally track the market fairly closely.
There are several subsectors within the MLP structure, most of which are energy-oriented. A top performer among diversified MLPs is Enterprise Products Partners (NYSE: EPD - News). The stock currently pays an 8.6% dividend, averaging 7% over the last five years. Investors now have a week to place their bets on the company's second-quarter performance. Enterprise will report its earnings next-Monday the 27th.
Williams Companies (NYSE: WMZ - News) operates in the natural gas pipelines and storage sector, and has a 35% stake in major gas pipeline owner Northwest GP. Currently yielding 7.3%, the stock has appreciated by 15.6% over the last month. In a weekend Wall Street Journal report, Louisiana-based certified financial planner Steven Stahler said, "you get paid for the volume going through the pipe, so the cost of the gas doesn't affect you." Therefore, despite what would seem to be a direct correlation to the energy markets, these MLPs aren't as exposed to the volatility of changing commodity prices.
San Antonio, Texas-based NuStar Energy (NYSE: NS - News) engages in the storage and transportation of petroleum products in North America and Europe. The company's investors currently earn an 8.1% dividend. Meanwhile shares are trading within 5% of their 52-week high.
Real-estate investment trusts, or REITs are another place to consistently earn solid dividends. Despite dividend cuts or suspensions over the last year, three REITs Indexes have an average dividend yield of over 8%.
Residential REITs top the sector rankings with an 8.7% yield. However, the Index is the only one in the category to remain in negative territory over the last month. American Capital Agency (NASDAQ: AGNC - News) is the top residential performer, gaining 11% in the last month. Investors will also be collecting a dividend, currently representing an annual yield of over 15%, on July 27.
Healthcare REIT investors are winning big over the last month. The Healthcare REIT Index's components are averaging 7.5% gains during the period and are cash distributions are averaging 8.1%. Medical Properties Trust (NYSE: MPW - News) has helped the average in both categories, gaining 15.8% over the last month and paying a 12% dividend.
The Airplane Leasing Stocks Index is not as diversified as its high yielding peers, with only four components. The companies are small, none with a market above a billion dollars, but they pay big dividends, an average of 8.6%.
Airplane leasing companies supply major airlines with aircraft via leasing agreements. In some cases, agreements are settled on major components, like engines, individually. Demand was crushed in the economic downturn as business travel budgets seized up, and the stocks fell hard to a bottom in early March. Since then the sector has trended upwards steadily, currently outperforming the S&P 500 over the last month.
Babcock & Brown Air (NYSE: FLY - News) lags on the Index's one-month 6.2% performance average, but it is the currently the top dividend play, yielding 10%. Genesis Lease (NYSE: GLS - News), on the other hand, has earned investors over 10% in the last month while paying them a 9% dividend.
The MLPs Index, Residential REITs Index, Retail REITs Index, and Airplane Leasing Stocks Index are the the top-4 yielding tickerspy Indexes.
Investors can follow these and other Indexes and view related performance charts and metrics at tickerspy.com.
Fun and informative, tickerspy.com is a free investing website where you can track multiple stock portfolios and compare against 250 proprietary Indexes tracking themes from nanotech to agriculture to precious metals. Best of all, tickerspy.com lets you spy on the portfolios of nearly 3,000 Wall Street institutions and hedge funds and see graphs of their performance. Try tickerspy.com today and find out how you stack up against investing legends like Warren Buffett! |
