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2012/01/14

How to Secure a Safe, High-Paying Income in Today's Market

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How to Secure a Safe, High-Paying Income in Today's Market
By Keith Kohl | Saturday, January 14th, 2012
Keith Kohl

Investors love certainty.

If I offered you two choices — taking a hundred dollar bill in exactly thirty days, or the possibility of that same hundred dollars tomorrow — which would you pick?

Though many investors tend to have a speculative streak in them, hoping to hit the next ten-bagger, it's highly doubtful even they would choose the latter option, given the current market climate.

One of the simplest and most efficient ways to earn a safe annual return in an unsure market is through solid, high-paying companies offering an attractive annual yield.

Today, I'll give you four safe energy plays that offer us a such a safe haven.

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Fact is, there's no safer place than energy.

After all, demand growth is practically guaranteed.

And when the IEA's International Energy Outlook 2011 was released, we got an idea of exactly how much...

Global energy consumption between now and 2035 will increase by about 53%.

The overall mix isn't terribly difficult to see — especially when oil, gas, and coal make up roughly more than 81% of our current energy mix.

And that mix isn't going to change much in the decades to come. Twenty-five years from now, that same IEA report still expects fossil fuels to make up three-quarters of our energy consumption.

Sure, it's a slight decrease (natural gas is the only fossil fuel projected to increase its share in the global mix), but it's certainly not the drastic change that a few expect — or would hope for.

Let me show you why things here in the United States aren't all that different from the global outlook:

energy mix us

Already this week, Nick Hodge and myself mentioned two high-yielding energy stocks, PetroBakken Energy (TSX: PBN) and Enerplus Corp. (NYSE: ERF).

Both are returning safe annual dividends over 7% to shareholders.

And I'll give you four more right now:

Company

Symbol

Market Value

Annual Yield

Enbridge Energy Partners

NYSE: EEP

$9.3 billion

6.54%

Pioneer South West Energy Partners

NYSE: PSE

$962.5 million

7.50%

Pembina Pipeline Corp.

TSX: PPL

$4.5 billion

5.60%

Kinder Morgan Energy Partners

NYSE: KMP

$27.6 billion

5.60%

Even though nothing in this market comes with a guarantee, this is the closest we'll find to a safety net.

The risk, as you may know, would be sudden (and in our opinion, inexplicable) declines in oil and gas prices.

Throughout 2011, the average spot price of Brent crude was more than $100 a barrel, with the light sweet crude from Texas not far behind:

crude price average

Of course, these high-yielding income stocks are only one way for you to take this coming energy bull by the horns.

Here are a few more ideas to help you profit...

Why Investors are Breaking Records in North Dakota: The Secret to Cracking Bakken Profits
You're no stranger to how wildly successful the Bakken oil formation has been since the USGS assessment in 2008. And now that the secret's out, you might think all the good plays are gone. But nothing could be further from the truth. I'll share with you a couple stocks in the Bakken still trading on the cheap — and making big-time money for shareholders.

Rare Earth and Precious Metals Investing 101: A New Generation of Wealth from this Super-Mine
The 170 billion barrels of bitumen buried in the Athabasca oil sands is the perfect distraction for us. Because while most investors are busy sifting through Alberta's oil investments, they're completely missing the profits that our readers are making on this tiny metals exploration company...

What China is Buying Now: AK47s, Rhino Horns, and Black Gold
Andarko Petroleum (APC), the $40 billion dollar Texas oil company, recently found between 15 and 30 trillion cubic feet of recoverable gas in the Mozambique Channel. It might be the biggest gas field found in the last decade... and as good a reason as any to buy the wildcatters.

Youngstown Fracturing Earthquake: Did Fracturing Really Cause 11 Earthquakes in Ohio?
Editor Jeff Siegel discusses how recent earthquakes in Youngstown, Ohio, will shape the future of fracturing.

Investors Can Find It All in the Bakken: A Little Oil Rivalry Goes a Long Way
There's a piece of Bakken profits for every type of investor.

Natural Gas, the New King of Energy: "It's Essentially Free Energy"
"Everything we do now is based on natural gas. Everything. It's a major shift that'll last for decades..."

Ron Paul's Gold: What Ron Paul's Buying
In his book, End the Fed, Ron Paul says: "Nothing good can come from the Federal Reserve. It is the biggest taxer of them all. Diluting the value of the dollar by increasing its supply is a vicious, sinister tax on the poor and middle class." Plus, what Dr. Paul has in his portfolio...

Invest in What You Know: Stay Away from the New Dot-Com Stuff
If you don't understand it, don't invest in it. Nick Hodge explains how to stick to the stuff you know best.

North American Oil Production On the Rise: OPEC Isn't Cutting It
As demand for oil increases, once-dominant oil-producing nations are producing less while North America picks up the slack.

Protect Yourself Against Higher Gasoline Prices: Chart Suggests Oil Going to $125 a Barrel
Some energy analysts are predicting a 50% jump in the price of oil if the situation in Iran turns into an armed conflict or an oil blockade... As a technical analyst, I'm starting to think that either scenario is baked in the cake, according to one oil chart.

Our Natural Gas Investments for 2012: Alaska's Last Chance at Redemption
Why Alaska is about to turn its back on the United States.

Gold Going to $2,200?: Morgan Stanley Predicts Gold to Hit $2,200 in 2012... Maybe as High as $2,464
I’ve been long gold for several years. I’m still long this year. Here's why...

Enjoy your weekend,

Keith Kohl Signature

Keith Kohl

follow basic@KeithKohl1 on Twitter

A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta tar sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.

 

From the Archives...

Distress Over Iranian Nuclear Ambitions
2012-01-13 - Nathan Holl

Solar is the Darling of the Sector
2012-01-13 - Brianna Panzica

Stay Away from the New Dot-Com Stuff
2012-01-13 - Nick Hodge

A Little Oil Rivalry Goes a Long Way
2012-01-12 - Keith Kohl

OPEC Isn't Cutting It
2012-01-11 - Nick Hodge


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Energy and Capital, Copyright © 2012, Angel Publishing LLC, 1012 Morton St, Baltimore, MD 21201. All rights reserved. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. Energy and Capital does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law.

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