While energy stocks usually steal the big-yield show, about half of the stocks below are outside the energy patch, which will help you add diversity to your high-yield holdings, observes Bryan Perry of Cash Machine.
Chesapeake Granite Wash Trust (CHKR)
Yield
11.78%. The operator of oil and gas properties in Oklahoma produced 3.1 billion
cubic feet of gas, enough to generate $27 million (58 cents per unit) in
distributable income while selling that gas at prices under $1.50 per mcf. With
gas prices firming up to $3 and oil holding above $90 per barrel, I would expect
future distributions to be easily maintained or increased.
Niska Gas Storage Partners (NKA)
Yield
11.30%. Shares of NKA have been consolidating for the past six weeks and are
starting to break out to the upside. Natural gas prices are breaking out and
winter is just around the corner. If it's a cold one, holders of Niska will fare
very well, as prices for stored gas will spike.
Northstar Realty Finance (NRF)
Yield
9.85%. A huge rally is underway in the distressed mortgage REIT market, which
we've been fortunate to have been riding a good portion of. As is true with the
other winners in the sector, buying the dips has been nothing but profitable.
SandRidge Permian Trust (PER)
Yield
11.46%. Again, let's use the lull in the high-yield energy patch to accumulate
shares. If natural gas prices get back above $3 per mcf and crude is trading
toward $100 per barrel, PER should make another attempt at $24, or roughly 20%
higher than its current price.
Prospect Capital (PSEC)
Yield
10.44%. This leading BDC is coming off a secondary offering preceded by some
insider buying that offers investors a nice entry point. PSEC pays monthly and
has made known that it intends to unload some portfolio holdings for some
handsome gains.
Rentech Nitrogen Partners (RNF)
Yield
12.91%. The high-powered fertilizer story behind RNF has been a boon to
shareholders all year. The shares finally took a breather and did some
constructive backing and filling, affording an attractive entry point to
initiate and add to positions.
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