By Paul Tracy, DividendOpportunities.com
Just a few weeks ago, we released our newest piece of research — The Top 5 Income Stocks for 2012.
These five high-yield stocks represent our favorite income ideas for the coming year, and they pay dividend yields of 7.0%… 8.8%… even 11.5%.
But there is one of these investments in particular I want to tell you about…
For years now we’ve seen the market rise one day, only to fall the next. Meanwhile, events considered to be “once in a generation” — credit crises, sovereign debt downgrades, and bailouts — are now happening with surprising frequency.
In short, the volatility has been unprecedented. But it doesn’t take a PhD to know that. What’s surprising, however, is how many dividend payers have not only held up in this environment… but have prospered. (I first told you about this phenomenon a couple of weeks ago.)
This includes one of our finds — Stock #4 of our Top 5 Income Stocks for 2012. This stock has simply ignored the turmoil.
I doubt you even know this company exists, despite it being vital to your day-to-day life. It owns pipelines, terminals, and storage facilities throughout the United States. These infrastructure assets ship and store gasoline, diesel, crude oil, and jet fuel. More importantly, the company has a monopoly on these assets — no one can simply come and build another pipeline to compete. That means its business is as steady as it gets.
In return for moving and storing these products, this company earns steady fees… that it then passes on to investors. Since going public in 2001, this company hasn’t missed a dividend, and it has increased the payment more than 35 times.
And if you’re worried about the ups and downs of the broader market, I don’t know if it gets much better than this stock — Magellan Midstream Partners (NYSE: MMP). Year after year it has delivered steady gains:
Keep in mind this chart shows just MMP’s share price. As I said, the company also pays a solid dividend. Right now the yield is about 5.0% based on quarterly distributions of $0.80 per share. In total, over the past decade MMP has returned 530% — an annualized gain of 20%. For comparison, the S&P 500 is up just 3% annually.
Of course, with investing there’s never a surefire thing. There’s no quality a company can possess that will guarantee its success going forward.
But Magellan obviously has a history of beating the market year after year without wild swings. Moreover, the partnership has $575 million in expansion projects underway to improve and expand its pipeline network. So with a steadily growing business, solid dividend, and commitment to returning cash to investors, we believe 2012 is likely to register as another market-beating year for MMP.
All the best,
Paul Tracy
StreetAuthority Co-founder
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Disclosure: Paul Tracy owns shares of MMP. StreetAuthority owns shares of MMP as part of the company’s various “real money” portfolios. In accordance with company policies, StreetAuthority always provides readers with at least 48 hours advance notice before buying or selling any securities in any “real money” model portfolio.
