Get a High Dividend Income from Exotic Investments

Are you sick and tired of investing in all those blue chip income stocks and those boring oil and gas master limited partnerships? Looking for some exciting investments that still pay a high dividend?

MLPs

Well, you have come to the right place. WallStreetNewsNetwork.com has identified over half a dozen exotic master limited partnerships, most of which have yields of over 3.5%. A master limited partnership is a partnership that is publicly traded and trades like a stock. Most MLPs invest in oil and gas properties, so the "exotic" category is everything else.

Amusement Parks

One example is Cedar Fair (FUN), which generates high income from amusement parks and water parks. Doesn't this company have a great stock ticker symbol? The yield on the investment is 5.3%. The stock, actually the MLP unit, trades at 19.8 times trailing earnings, and 14.63 times forward earnings. For the latest quarter, the company reported a 7.4% drop in earnings year over year on flat revenues. However, it reported a 1% increase in net revenues and record year to date revenues of $939 million.

Trees

Another exotic MLP is Pope Resources (POPE) which is in the timber industry. The nice thing about this industry is that the inventory keeps going up in value, unlike most other types of inventory. The stock trades at 13.6 times trailing and 18.8 times forward earnings. The investment provides a decent yield of 3.7%.

Cemeteries and Fertilizer

Do you want to invest in cemeteries? How about fertilizer? Or toll roads or fracking sands? You can do it through MLPs, all of which are listed on the free list of exotic master limited partnerships at WallStreetNewsNetwork.com. Now you know how to spice up your portfolio.

Disclosure: Author didn't own any of the above at the time the article was written.

By Stockerblog.com

Gasoline Cracks $5 a Gallon at the Pump in California

Over the weekend, I noticed that the price of gasoline at the pump has really skyrocketed in anticipation of the summer travel season. At one gas station I stopped at along Highway 5 near Bakersfield in California, the price of regular gas was $4.999 per gallon.

Since gas stations won't give you one-tenth of a cent in change, the price is essentially five dollars a gallon. And if you have to get high octane gas, you would have the pleasure of paying $5.20 a gallon.

Of course, this excludes the unusual gas situations in areas such as Catalina Island, which has very few cars to begin with. There you would be paying over seven dollars a gallon.

If you think oil and natural gas is a good area to invest in, you may want to consider the oil and gas Master Limited Partnerships, also known as MLPs. WallStreetNewsNetwork.com has a selection of a dozen oil and gas MLPs, mst of which yield in excess of 8%.

A couple of examples are BreitBurn Energy Partners (BBEP) which has a yield of 9.5% and Mid-Con Energy Partners (MCEP) paying 9.2%. Also, Vanguard Natural Resources (VNR) is structured as an LLC as opposed to a limited partnership. It pays a yield of 8.2%.

Talk to your accountant before putting MLPs in your retirement plan, as their can be adverse tax consequences. But if you own them outside your retirement plan, they can provide you with a very decent income, subject to interest rate risks of course.

Disclosure: Author didn't own any of the above at the time the article was written.

By Stockerblog.com

How to Receive Dividends that are Tax Free

It sure would be nice when tax time comes around to realize that much of the dividend income you are receiving is non-taxable. So what kind of tax free dividends are these? First, many master limited partnerships, commonly known as MLPs, pay out dividends that are a return of capital, and are therefore non-taxable. However, these dividends are not really tax free as the tax has to be paid eventually when the investment is sold. MLPs are normally issued by oil and gas companies that are able to shelter the income using depreciation and amortization, which are non-out-of-pocket tax deductions.

However if you are looking for tax free income that is totally tax free, you should consider the municipal bond closed end funds, sometimes referred to as tax-free stocks or tax-free CEFs. These CEFs own municipal bonds that pay interest that is exempt from Federal income taxes and may be exempt from state income taxes if issued in the state you live in or issued by one of the US territories, such as Puerto Rico, the Virgin Islands, or Guam. Munis are generally issued by states, counties, cities, and other governmental entities such as school districts, sewer districts, bridges, and water and power departments. WallStreetNewsNetwork.com just recently updated its list of over 125 tax-free income CEFs, and more than 100 sporting yields greater than 5%.

There are many advantages besides the tax free income feature to these CEFs. Almost all of them pay dividends monthly, whereas, if you by an individual bond, the interest is paid semi-annually. CEFs have no minimum investment, whereas municipal bonds are sold in $5,000 denominations and many brokers have minimum purchase requirements of $15,000 to $25,000. You also have better liquidity with CEFs as prices are quoted real time and quotes are immediately available on the Internet. In addition, CEFs provide diversification through a group of bonds in the portfolio.

One of the funds that has been around for a while is the Dreyfus Strategic Municipal Bond Fund Inc. (DSM), which was founded in 1989. It currently yields 7.5%, and is selling for a 6.4% discount to Net Asset Value (NAV=the intrinsic value of the shares if the entire fund were liquidated). The fund does use some leverage amounting to 34%, which is far lower than many other tax free CEFs. The management fee is a reasonable 0.50%.

For New Yorkers, there is the PIMCO New York Municipal Income Fund (PNF), founded in 2001. The fund yields 7.1%, and trades at a 6.3% discount to NAV. Leverage is 42%, and the management fee is 0.65%. This CEF has the added bonus of seeking to be free of the Alternative Minimum Tax, also known as AMT, for New York residents.

California residents might want to consider the Invesco Van Kampen California Value Municipal Income Fund (VCV), yielding 7.4%. Discount to NAV is 10.5%, with 35% leverage. The company, founded in 1992, charges a management fee of 0.55%. About 5.4% is subject to AMT.

Here are some issues to watch out for before investing in tax free CEFs:
* high leverage
* high management fees
* trading at a premium to NAV
* bonds in the portfolio that may be subject to the Alternative Minimum Tax
* quality of bonds in the portfolio

The biggest risk of investing in these funds is a rise in interest rates, which will cause the bonds to fall in price and therefore the CEFs to drop in value.

For a list of tax free income closed end funds, which includes yields, discounts and premiums, leverage, management fees, date founded, and other information, go to WallStreetNewsNetwork.com.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

Hot Oil MLPs with High Incomes

Investors looking for high incomes often turn to MLPs or Master Limited Partnerships, and generally are companies in energy, primarily oil and gas exploration and production. According to WallStreetNewsNetwork.com, there are over a dozen Oil and Gas Exploration and Production MLPs, with yields ranging from 3.1% to 9.9%.

MLPs are investments that are similar to income royalty trusts, except that they are structured as limited partnerships. MLP's differ from high income stocks in several ways. Since they pass through income without being taxed at the corporate level, they avoid double taxation. In addition, tax deductions can be passed through to the holders of MLPs, providing sheltering of the MLP dividends.

But there are differences when you compare them to income royalty trusts. MLPs shouldn’t be put into a retirement plan because of the UBTI or Unrelated Business Taxable Income problem, which could jeopardize the tax deferred status of retirement plans. The UBTI issue is way beyond the scope of this article so you should certainly talk to your accountant about any and all tax consequences of MLPs. Also, MLPs don't send out 1099 forms, they send out a Schedule K-1 Form, and the income is reported differently on tax returns. This may mean extra hours and aggravation when you or your accountant prepare your taxes.

One example is Mid-Con Energy Partners, LP (MCEP), which pays a yield of 8.8%. The dividend is paid quarterly. This Dallas, Texas based company explores, develops, and produces oil and natural gas on properties in southern Oklahoma, northeastern Oklahoma, and parts of Colorado. The MLP trades at 11.9 times trailing earnings and 10.5 times forward earnings.

Pioneer Southwest Energy Partners L.P. (PSE), based in Irving, Texas, yields 8.2%. The company has a price to earnings ratio of 11.5 and forward PE of 10. Pioneer operates in the Spraberry field in the Permian Basin area of west Texas.

One high yield company that is actually structure as an LLC instead of a MLP is Linn Energy, LLC (LINE), which operates in the Mid-Continent, the Permian Basin, Michigan, California, and the Williston Basin. Linn pays a dividend rate of 6.8%. It has a forward PE of 24.9. It was the first publicly traded independent oil and natural gas limited liability company in January 2006.

In spite of the fact that Linn is an LLC, it is classified as a partnership for tax purposes, so a unitholder is considered a partner and receives a Schedule K-1. In regards to the taxation of the income, the company website says "In general, cash distributions received from LINN Energy are not taxable. You are typically only required to report in your tax return items of income, gain, loss, deduction or tax credit reflected on your Schedule K-1. However, if the cumulative cash distributions received from LINN Energy exceed your tax basis in the Company, you could be taxed on the amount exceeding your tax basis."

For a free list of all of the oil and gas exploration and production master limited partnerships including three that pay more than 9%, go to WallStreetNewsNetwork.com. The list can be downloaded, updated, and sorted.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

Exotic High Yield Master Limited Partnerships Yielding up to 10%

When investors think of MLPs or Master Limited Partnerships, they usually think of companies involved in energy, including oil, gas, and coal exploration, production, refining, and transportation. However, there are more than half a dozen MLPs in what I would call exotic industries, everything from fertilizer to sand to amusement parks to nuts. Six of these exotic MLPs have yields in excess of 3%, according to WallStreetNewsNetwork.com.

MLPs are investment vehicles that are similar to income royalty trusts, except that they are structured as limited partnerships. MLP's differ from high income stocks in several ways. Since they pass through income without being taxed at the corporate level, they avoid double taxation. Plus, MLPs can pass through tax deductions.

However, they differ from income royalty trusts in several ways. MLPs shouldn’t be put into a retirement plan because of the UBTI or Unrelated Business Taxable Income problem, which could put the tax deferred status of retirement plans in jeopardy. This issue is beyond the scope of this article but you should definitely talk to your accountant about the tax consequences. Also, MLPs don't send out 1099 forms, they send out a Schedule K-1 Form, and the income is reported differently on tax returns. This may mean extra time and hassle when you or your accountant prepare your taxes.

One example is Terra Nitrogen Company, L.P. (TNH) pays a yield of 7.9%. This Sioux City, Iowa based company produces and distributes nitrogen fertilizer products, such as anhydrous ammonia and urea ammonium nitrate solutions. The company, which trades on the New York Stock Exchange, has a price to earnings ratio of 13.1. Earnings for the latest quarter were up 18.3% on relatively flat revenues. Dividends have been paid since April of 1992.

Stonemor Partners LP (STON) is in the business of operating cemeteries across the United States. This Levittown, Pennsylvania based company was founded in 1999, and has cemeteries in 26 states and funeral homes in 18 states. The MLP yields 9.8% and pays quarterly. Earnings for the latest quarter were negative on a 2.3% increase in revenues.

Cedar Fair LP (FUN) has a great stock ticker symbol. I owns 11 amusement parks, seven water parks, and five hotels. The company was founded in Sandusky, Ohio in 1983. The company trades at 14.6 times trailing earnings, 12.7 times forward earnings, and a yield of 4.9%. Earnings were up an incredible 748.2% on an amazing 25.7% boost in sales.

For a free list of all of the top exotic master limited partnerships including one which pays more than 13%, which can be downloaded, updated, and sorted, go to WallStreetNewsNetwork.com.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com