Top American Oil Royalty Income Trusts

Now that oil is over $100 a barrel, income investors are taking a closer look at oil and gas income investments. Several options are available. First, there are the stocks of the multinational oil companies, such as Exxon Mobil Corp. (XOM) with a 2.1% yield and ConocoPhillips (COP), which has a 3.3% yield.
But there are other investment instruments, including oil income royalty trusts, oil master limited partnerships also known as MLPs, and one example of a publicly traded Limited Liability Company or LLC. Income from trusts and MLPs avoid double taxation; virtually all earnings are passed through to the shareholders without being taxed at the company level.

The royalty trusts have several advantages over the partnerships. Limited partnerships don't send out 1099 forms, they send out a Schedule K-1 Form, and the income is reported on your tax return differently from regular dividends, with additional forms and preparation time involved. In addition, putting an MLP into a retirement plan can create problems because of the UBTI or Unrelated Business Taxable Income issue, which could put the tax deferred status of your retirement plan in jeopardy. I am not an accountant, so discuss MLP's with your tax advisor or CPA for clarification, before investing.

The royalty trusts don't have this problem as they send out 1099's on their income distributions, similar to dividends. According to a list just developed at WallStreetNewsNetwork.com, there are several different oil royalty income trusts with yields ranging from 4% to above 11%.

For example, Hugoton Royalty Trust (HGT), which trades at 13.8 times earnings, pays a generous yield of 6.7&. This Dallas, Texas based company pays dividends monthly and was founded in 1998.

San Juan Basin Royalty Trust (SJT) yields 6.6% and sports a price to earnings ratio of 6.6%. This Fort Worth based company also pays monthly and was founded in 1980.

Mesa Royalty Trust (MTR) is an Austin, Texas trust that has been around since 1979. It trades at 13.8 times earnings and yields 5.7%. As with most other oil trusts, distributions are made monthly.

When you check out the free list of oil income investments at WallStreetNewsNetwork.com, pay close attention to the last column, which shows the company structure, either limited partnership, trust, or LLC. Also, although a few of these have extremely high yields above 8%, use caution before investing as the yields may not be sustainable.

Disclosure: Author does not own any of the above.

By Stockerblog.com

Top Monthly Dividend Stocks

There are plenty of benefits of stocks that pay their dividends monthly, whether you are a retiree looking for income or an active investor looking for places to put your profits. According to the report that was just updated by WallStreetNewsNetwork.com, there are almost 300 different securities that pay monthly, most with very high yields. Technically, these stocks are real estate investment trusts, oil income trusts, closed end bond funds, and closed end income stock funds, which pay dividends every month. The advantages to having monthly dividends versus quarterly or annual dividend stocks are that your invested capital is returned faster, compounding happens quicker, and there is usually less volatility. As an added feature, many of these pay tax free income.

Here is a random selection of the hundreds to chose from:

Baytex Energy (BTE) 6.3%
Blackrock Apex Municipal Fund Inc. (APX) 6.0%
Calamos Convertible & High Income (CHY) 8.5%
Evergreen International Balanced Income (EBI) 6.0%
Hugoton Royalty Trust (HGT) 8.1%
LMP Real Estate Income Fund Inc. (RIT) 8.2%
Permian Basin Royalty Trust (PBT) 8.6%
Reaves Utility Income Fund (UTG) 7.2%
Western Asset High Income Opportunity Fund (HIO) 9.5%

Some things to keep in mind when you are doing your due diligence and analysis on these investments. Be careful of the ones with high management fees, watch out for the ones with limited liquidity and which trade very few shares on a daily basis, and if you invest in the municipal bond closed end funds, make sure you know the consequences of the Alternative Minimum Tax. You also want to find the ones that trade at a discount to Net Asset Value, and avoid the ones using excessive leverage.

To see the latest updated list of over 280 monthly dividend stocks, including several that have yields of 10% or more, go to WallStreetNewsNetwork.com. Remember, the very high yields may not be sustainable.

Author does not own any of the above.

By Stockerblog.com