Natural gas has quickly emerged as a top power source, with the world trying to balance rising demand along with carbon emission commitments. Thanks to rising demand from data centers, artificial intelligence and a strong business climate, the need for energy is rising. At the same time, reducing carbon emissions and adhering to new climate accords have many end-users looking toward plentiful natural gas as a bridging source of energy. For firms in the sector, like our latest Best Dividend Capture Stocks List pick, it has provided plenty of tailwinds to its earnings!
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Those tailwinds for our pick come from the natural gas ecosystem. Our pick isn’t a producer of natural gas, but a transporter and distributor of the fuel. This includes operating one of the largest pure-play natural gas utilities in the nation and supplying over 3 million customers. Meanwhile, the firm also operates a large intrastate pipeline system connecting key production fields, such as the Barnett, to smaller utilities, industrial end-users, independent power plants, and other pipelines. These utility and pipeline operations provide plenty of steady cashflows, benefiting both our pick and its investors through rising dividends.
The best part is our new pick has continued to grow as well. The firm hasn’t been shy about using M&A to add bolt-on pipeline transactions and its operating area. Moreover, a slew of new intrastate pipelines and gathering projects in key shale fields have added growth to its bottom line — all of which has made the pick a cash-flow machine.
As such, investors have continued to support shares of our pick, and it’s become a great dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Monday, November 25, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 3.1 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our natural gas utility pick could be a lucrative option.
