Here are a few reasons why this stock makes sense for many investors seeking income:
1) BreitBurn Energy Partners is an independent oil and gas limited partnership. It acquires and develops oil and gas properties. It has major projects located in California, Wyoming, Florida, Texas, Michigan, Kentucky and Indiana. While energy could see some reduced demand in a weak economy, it is not going away anytime soon, and that is why BreitBurn has a solid business model.
2) BreitBurn is set up as a limited partnership that is focused on paying out the cashflow it generates to shareholders. That is what allows this investment to pay an extraordinary yield of nearly 10%.
3) This company recently raised its quarterly cash distribution to 46 cents per share, which will be payable on August 14, 2012 to the record holders of common units on August 10, 2012. The distribution has been rising since May 2010, when it was 37.5 cents. Dividend growth is an important factor for investors to consider, and this trend could continue as BreitBurn expands.
4) The shares appear undervalued in terms of yield. For example, major oil stocks like Exxon (XOM) only offer a dividend yield of about 2.6%. Other well-known dividend stocks in the oil and gas industry like Kinder Morgan, Inc. (KMI) offers a current dividend yield of about 3.9%. This means BreitBurn is on the upper end of the yield range for this sector, and the payout compares to companies like Seadrill (SDRL), which yields about 8.4% and has been trending higher.
"My well came in big, so big, Bick and there's more down there and there's bigger wells. I'm rich, Bick. I'm a rich 'un. I'm a rich boy." - Jett Rink
Don't believe anything I say. Do your own DD. Insert huge disclaimer here ____________.
