Eight percent is nothing to sneeze at, especially when you consider that these stocks are dealing in oil and gas and that higher oil prices tend to be a positive for petroleum explorers, drillers and sometimes even refiners (and vice-versa, of course, if petroleum prices go down).
Nonetheless, many of these companies have moved up quite a bit over the past two years, so investors should be wary of buying high. Of course, the whole market has moved up quite a bit in that time frame, and over 7% means about 4x the yield of the S&P 500 (SPY), which yields approximately 1.8%, and almost 3x the Dow Jones Industrial Average (DIA), which is yielding about 2.5%.
The following is a list of the six American small-cap oil and gas stocks that currently yield over 8%, listed in alphabetical order:
- Breitburn Energy Partners L.P. (BBEP)
- Yield: 8%
- Market Capitalization: $1.13 Billion
- Calumet Specialty Products Partners LP (CLMT)
- Yield: 8.7%
- Market Capitalization: $848 Million
- Encore Energy Partners LP (ENP)
- Yield: 9.4%
- Market Capitalization: $913.2 Million
- Ferrellgas Partners LP (FGP)
- Yield: 8.9%
- Market Capitalization: $1.7 Billion
- Martin Midstream Partners LP (MMLP)
- Yield: 8%
- Market Capitalization: $772 Million
- MV Oil Trust (MVO)
- Yield: 8.3%
- Market Capitalization: $447 Million
Do note that these are not standard corporations, but Master Limited Partnerships and a Trust. Partnerships do not pay the standard dividends that would normally generate a 1099 tax form. Instead, they pay distributions and produce K-1 forms, and they may not be suitable for retirement accounts depending on the size of the annual distribution (please consult your accountant if you are unfamiliar with MLP and Partnership suitability for your account).
Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.