No Debt High Yield Stocks

If a company has debt, it can be beneficial if the company can earn far more than the interest expense. But there are drawbacks to incurring debt. When times get tough, earnings drop, and the business can't afford the debt service, then the viability of the company is at risk. Many strong companies are debt free, such as Apple (AAPL) and Amazon (AMZN). If you put the debt free trait with a high yield, you should end up with a successful investment.

There are a selection of over ten stocks on the latest No Debt High Yield Stocks List at WallStreetNewsNetwork.com, which have yields ranging from 2% to above 9%, all of which are free of debt.

One example is Paychex, Inc. (PAYX), which provides human resource, payroll, and benefits outsourcing solutions to primarily small and medium size businesses. This debt free company pays a yield of 4.3%, and has been paying quarterly dividends since 1994. It trades at 17 times earnings. Earnings for the latest quarter were up 12.9%, on a 8.6% increase in revenues.

Another example is Erie Indemnity Co. (ERIE), an insurance company based in Erie, Pennsylvania, which also has no debt. The stock sports a yield of 2.6%, and a forward price to earnings ratio of 25. Net income per diluted share for the latest quarter was up 6.1% year over year, on a revenue increase of 35.9%.

Several of the stocks on the list are royalty trusts such as the Sabine Royalty Trust (SBR) which is debt free and yields 7.8%.

To see a free list of many other companies that have no debt and pay high yields, half a dozen of which pay more than 6%, go to WallStreetNewsNetwork.com. The list can be downloaded, sorted, and updated.

Disclosure: Author owns AAPL and AMZN.

By Stockerblog.com

Plenty of Oil Income Royalty Trusts Yielding Over 5.5%

Over the last month, the price of crude oil has increased from $77 a barrel to $82 a barrel, an increase of 6.5%. Income investors that want exposure to oil and gas have many options. Several of the multinational oil companies have decent yields, such as Exxon Mobil Corp. (XOM) with a 2.7% yield and ConocoPhillips (COP), which has a 3.6% yield.

However, for the really high yields, investors have to turn to the oil income royalty trusts and the oil master limited partnerships or MLPs. In both cases, income generated avoids double taxation; virtually all earnings are passed through to the shareholders without being taxed at the company level.

Of these options, the royalty trusts have many 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, you should never put an MLP into a retirement plan because of the UBTI or Unrelated Business Taxable Income problem, which could put the tax deferred status of your retirement plan in jeopardy, based on my understanding. However, since I am not an accountant, I am not giving tax advice so please discuss MLP's with your accountant or CPA for clarification, before investing in MLPs.

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 nine different oil royalty income trusts with yields ranging from 5.7% to 13%. For example, Cross Timbers Royalty Trust (CRT), with a price to earnings ratio of 15, sports a yield of 8.1%. This trust owns 90% net profits interests in many royalty and overriding royalty interest properties in Texas, Oklahoma, and New Mexico. Distributions have been paid monthly since 1992.

Sabine Royalty Trust (SBR), founded in 1982, receives royalties from oil and gas properties in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. The stock has a PE ratio of 17 and a yield of 7.3%. This trust also pays 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.

Disclosure: Author does not own any of the above.

By Stockerblog.com

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 WallStreetNewsNetwork.com, 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 WSNN.com. Almost all the stocks on the list yield more than 4%.

Author owns YHOO.

By Stockerblog.com