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Back in 2012 when the MLP Linn Energy (NASDAQ:LINE) issued shares in the form of a corporation LinnCo (NASDAQ:LNCO) for acquisitions in a growth strategy, I wrote this article and purchased LNCO shares. During the ensuing year, there has been much hullabaloo over LINE & LNCO stock concerning a proposed merger with another corporation Berry Petroleum (BRY). The merger was extended and finally, the price offered was raised from 1.25 LNCO shares for each BRY share to 1.68 LNCO shares for each BRY share. Today, the merger was approved by the shareholders of each company. Many of my friends sold LINE or LNCO shares this year due to the very real possibility that the merger would not go through. The price of LINE and LNCO was extremely volatile as I will demonstrate in my dividend growth analysis.

Being retired, I have held the stock for the dividends and applauded this summer when the company went to a monthly payout to thwart the shorts. This has also improved the dividend growth rate if the dividends are reinvested in the stock (like my grandson does). I, on the other hand use the monthly payout to purchase shares of other companies. This year those companies were Ross Stores (NASDAQ:ROST) and presently Comcast (NASDAQ:CMCSA). The new monthly dividend approximates the monthly 401k plan investments that I made while working in the 20th century and performs better as a drip plan when I need to keep my portfolio in balance. I will present my dividend reinvestment spreadsheet for LINE below, for a $10,000 investment from February 2008 to the present (remembering that LNCO is just a pass through stock for LINE shares).

StockDate of reinvestDiv Rate# SharesDividendDrip price# Shares purTotal ValueCurrent Yield
Totals  903.36$11,291.46$30.27400.36$27,344.809.59%
 12/10/13$0.24896.20$216.88$30.277.16$27,344.809.59%
 11/06/13$0.24889.13$215.17$30.467.06$27,298.209.53%
 10/09/13$0.24880.95$213.19$26.058.18$23,161.9511.15%
 09/06/13$0.24872.25$211.08$24.258.70$21,363.0511.98%
 08/08/13$0.24863.98$209.08$25.308.26$22,067.8211.48%
 07/08/13$0.24855.74$207.09$25.138.24$21,711.8611.56%
 05/06/13$0.73838.73$608.08$35.7517.01$30,592.748.11%
 02/05/13$0.73822.95$596.64$37.8115.78$31,712.457.67%
 11/02/12$0.73808.79$586.37$41.4014.16$34,070.217.00%
 08/03/12$0.73793.82$575.52$38.4614.96$31,106.007.54%
 05/04/12$0.73779.33$565.02$38.9914.49$30,951.207.44%
 02/03/12$0.69764.89$527.78$36.5514.44$28,484.617.55%
 11/02/11$0.69750.87$518.10$36.9414.03$28,255.157.47%
 08/03/11$0.69737.72$509.03$38.7313.14$29,081.107.13%
 05/04/11$0.66725.13$478.59$38.0112.59$28,040.916.95%
 02/03/11$0.66713.10$470.64$39.1012.04$28,352.726.75%
LINE11/02/10$0.66699.60$461.73$34.2013.50$24,387.907.72%
 08/04/10$0.63685.66$431.97$31.0013.93$21,687.468.13%
 05/05/10$0.63668.96$421.44$25.2316.70$17,299.239.99%
 02/03/10$0.63653.45$411.67$26.5515.51$17,760.819.49%
 11/04/09$0.63636.94$401.27$24.3016.51$15,878.8710.37%
 08/05/09$0.63619.20$390.10$21.9917.74$14,006.2711.46%
 05/04/09$0.63596.40$375.73$16.4822.80$10,204.3915.29%
 02/04/09$0.63573.74$361.45$15.9522.66$9,512.5715.80%
 11/05/08$0.63551.34$347.35$15.5122.39$8,898.6716.25%
 09/05/08$0.63534.38$336.66$19.8516.96$10,944.1512.70%
 05/02/08$0.63518.93$326.93$21.1615.45$11,307.5311.91%
 02/06/08$0.63503.00$316.89$19.8915.93$10,321.5612.67%

In addition, I will graph the results:

(click to enlarge)

It can be seen from the chart that the yield has been high for the entire period, especially during times of financial stress, such as the Great Recession of 2008-2009 and the Taper Tantrum of 2013. However, through it all, LINE/LNCO did not cut the dividend. I believe that the stock will rise now that the intrigue is over, but my main reason for purchasing LNCO is for the dividends.

I will show the price action below for LINE stock:

(click to enlarge)

It can be seen that the stock has been volatile, but not as bad as the mREITs.

Conclusion: For the retiree it is important to have a steady stream of growing dividends to supplement social security and pension income. By studying the market over the past 10 years, I have found that a good sector to produce these steady returns is the energy sector. Before you invest in this stock, you should thoroughly investigate all ramifications of these shares of Linn Energy to understand what you are buying. I am pleased with them so far.

Disclosure: I am long LNCO, CMCSA, ROST. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: My grandson is also long the above stocks.

Source: With The Berry Petroleum/Linn Energy Merger Approved, LINE/LNCO Is A Buy