While still high, prices for crude oil and natural gas have started to get a bit volatile. Thanks to economic worries and demand changes, prices for these commodities have started to really hinder some results at energy producers. However, for our latest Best Energy Dividend Stocks List pick, cash flow and stability remain strong, helping it support its 9%+ dividend yield!
You can check out the Best Energy Dividend Stocks List to explore all the stocks.
The secret to our pick’s success? It doesn’t produce energy. It moves it around the country via a system of pipelines, storage tanks and terminals. Energy producers pay a fee to use this “toll road.” And those fees are based on volumes, and not the underlying price of the commodity. This produces steady cash flow to its bottom line.
Moreover, its general partner requires a steady diet of crude oil to feed its refineries. As such, the vast bulk of our pick’s cash flow is secured via long-term contracts that are favorable to both parties. Add in our pick’s forays into natural gas transport and you have a recipe for long-term success.
That success has also translated into gains for investors. Thanks to its MLP tax status, our pick has paid a high and growing dividend for nearly a decade. Ultimately, our pick represents a top-notch energy dividend stock with plenty of yield support.
