Being a retiree living on the income markets has been anything but easy the last few years. With bank CDs and US Treasury Bills at record lows, trying to scratch out a living on these instruments has been tough if not impossible. Also the risk of higher inflation hangs over a retiree's head as a constant source of worry. In response, many income investors have been forced out of the bond markets and into the world of equities in search of yield. Typically, their search patterns are pretty predictable, starting with the precious metals and energy markets. Now getting an income yield out of the precious metals market is tough as there are not a variety of choices. Next they typically focus on the energy markets that offer several choices for that desired income. Oil, natural gas, and related partnerships that focus on storage/transportation, all come up on the radar for the income investor. What is often overlooked though is the coal side of the house. There exists several investment options dealing with coal that provide great competitive income yields. Listed below are some of the top choices to consider.
Alliance Resource Partners, L.P (NASDAQ:ARLP): ARLP is a publicly traded master limited partnership that represents the fourth largest eastern US coal producer. The company has locations in five states with nine mining operations, and another one is on the way. For the first quarter Alliance reported a strong increase in coal sales volumes and record prices, which drove revenues to a record $423.3 million, 11% higher than the same quarter in 2010. Management has stated that it continues to see strong customer demand for its coal products, and it expects the 2011 revenue to continue to grow. As a result, ARLP has a yield of 4.9% and the company has a history of raising its distribution regardless of what coal prices do.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.