Wednesday, February 17, 2010

What Debt Free Stock Yields Over 16%

It is amazing that there are still plenty of high yielding stocks out there, with high yielding being above 6%. However, when you see a stock yielding above 16%, you really take notice. But is the yield real?

An updated list of high yield debt free stocks was just posted by, and at the top of the list was BP Prudhoe Bay Royalty Trust (BPT), which is technically a royalty trust, somewhat similar to the Canadian oil income trusts. The company owns overriding royalty interests in minerals in the Prudhoe Bay oil field located on the North Slope in Alaska.

If you look at the company on Yahoo (YHOO) Finance, the stock shows a yield of 16.5%, which is correct based on the latest quarterly payment. However, if you look at the last four quarterly payments, the yield is actually 9.1%, still very high though.

Another example is the investment management company, AllianceBernstein Holding LP (AB), which is technically a publicly traded limited partnership. The yield based on the latest payment is 10.1%, yet based on the last four quarterly dividends is just 5.3%, still a decent payout.

If you like monthly dividends, there are plenty to choose from, such as Sabine Royalty Trust (SBR) with a yield of 7.7%.

Just remember, some of these high yields may not be sustainable. Look what happened to Nordic American Tanker Shipping Ltd (NAT). It's last three quarterly dividends have gone from 88 cents to 50 cents to 10 cents.

To access a free list of high yielding stocks with no debt, which can be changed, sorted, and downloaded, go to Almost all the stocks on the list yield more than 4%.

Author owns YHOO.


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