| Monday, July 21, 2014 | Issue #2337 | |
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Double-Digit Income and Growth? No Problem David Fessler, Energy and Infrastructure Strategist, The Oxford Club
 Recently I went looking for the best candidates for both growth and income in the energy industry for 2014.
I used the proprietary stock screener I developed for my research service Peak Energy Strategist. I call the screener the Peak Energy Indicator, or PEI.
I used the PEI to scour the 114 energy master limited partnerships (MLP) available to investors. It identified just three.
Each of them pays a dividend greater than 10% annually and has excellent potential for growth as well.
Today I wanted to tell you about one of them. (The other two are in my Peak Energy Strategist portfolio.)
A Single Invention Is Generating an Average of $511,111 Per Year...
According to the latest numbers, this invention is producing as much as $9 million in the first 30 months... And then continues paying out thousands of dollars monthly for 45 years.
Report after report is coming out with stories of people becoming "overnight millionaires" thanks to this unusual invention. Go here to see if it's something that could work for you. | |
CVR Refining L.P. (NYSE: CVRR) is a downstream energy company. It turns crude oil into gasoline, distillates, sulfur, asphalt and other products at two refineries in Oklahoma.
Its Coffeyville, Kansas, refinery has a crude oil throughput of 115,000 barrels per day (b/d) of crude. Its Wynnewood refinery has a throughput rate of 70,000 b/d.
The refineries' location makes it possible for CVR to use as much as 80% West Texas Intermediate crude oil as feedstock. This is important, as it provides a huge price advantage over other refineries that must use higher-priced Brent crude.
CVR Refining has one of the lowest operating expenses in the industry.
CVR's crude feedstock comes from the Permian Basin in West Texas, the Williston Basin in North Dakota and the Denver-Julesburg Basin in Colorado. Its finished products are marketed throughout the Midwest.
The company has another big advantage over many of its competitors: It owns 350 miles of gathering pipelines. It also has 6 million barrels of total storage capacity at its refineries.
At this writing, CVR Refining's dividend yield is a mouth-watering 14.5%.
The only catch is its yield can vary from quarter to quarter. Its debt service is a priority, and is paid before distributions.
Like most refineries, CVR's earnings - and therefore its cash available for distribution - depend on the gross margins of the refinery during that particular quarter.
For 2014, the company has an average of 4.1 million barrels of crude hedged at attractive crack spreads. Crack spread is the difference between the price of a barrel of crude and the finished products that come from it.
The lower the crude price and the higher the finished price, the greater the crack spread. Crack spread has a direct correlation to company profits.
Hedging crude prices provides protection to both earnings and dividends in a big-downside scenario. CVR Refining also hedges some of its refined gasoline to further protect its earnings capacity.
The bottom line is this: CVR Refining's prospects for both growth and income in 2014 are excellent. I believe its hefty dividend is safe from cuts due to CVR Refining's aggressive hedging strategy and its feedstock price advantage.
If you're looking for a beefy dividend and the prospect of growth, consider adding a few shares of this specialty refiner to your energy income portfolio.
Good investing,
Dave Fessler
P.S. While the market delivers a mediocre year for most investors, subscribers of my Peak Energy Strategist service have enjoyed huge profits. I'm talking about gains as high as 88%... 94%... and even 179%. And all but two of 22 stocks in the portfolio are in the money. To learn how to join us, click here. | |
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The Coming "Crisis" in the U.S. Has Obama Terrified
"We're not as prepared as we should be," Obama sheepishly said recently.
What the president is referring to is an event that could cripple the U.S. economy ... It's also one Oxford Club editor Sean Brodrick had previously predicted. On April 27, he proclaimed, "Sometime very soon in 2014, we're going to see the first major (*word redacted*) in the United States."
Click here for the full story. | |
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Sadly, investors aren't the only victims of Wall Street. On July 17, Microsoft Corp. (Nasdaq: MSFT) CEO Satya Nadella announced 18,000 layoffs in a bid to make the company more competitive. Even with the news of deep job cuts, Microsoft's shares jumped. In fact, shares are up 19% year to date. But why? Aren't layoffs a bad omen? Read On... | |
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This market may or may not be topped out, but it really doesn't matter, because most people are acting like it is. That always spells trouble for the small investor: that's you and me. Read On... | |
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Today's chart is the granddaddy of all technical stock market indicators: the New York Stock Exchange Bullish Percent Index (NYSE BPI). A BPI tracks the percentage of stocks that are on point-and-figure "Buy" signals. Read On... | |
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