Energy stocks have always been our favorite. The sheer necessity of the product and resultant lack of volatility in these stocks turn them into a league of their own. Apart from lower fluctuations in prices, their dividend yields have always been attractive. Today, we will have a look at some of the better performing stocks in the industry, which are yielding a minimum of 5%.
Exelon Corp. (NYSE:EXC) The electricity giant has an enviable market capitalization of $28.08 billion. Due to its sheer size, the company benefits heavily from economies of scale. Currently trading at a price of $42.38, its fluctuations in the last 52-weeks have been minimal, as high $45.27 and as low as only $39.05. This is one stock you can count on. Dividend yield has been a mighty 5% and the price earnings ratio 10.59. Revenues have been fat, the gross margins and operating margins are no less impressive, with figures of 36.35% and 23.84%, respectively. Both of these figures beat competitors like Dynegy Inc. (NYSE:DYN), which exhibits negative operating margins, while they are consistent with the PPL Corp.’s (NYSE:PPL) and Ameren Corporation ’s (AAE) financial results. Exelon has never missed a dividend payment for the last 24 years, and it is time you jump on the bandwagon too.
Magellan Midstream Partners LP (NYSE:MMP) is involved in the transportation, storage and distribution of refined petroleum products and crude oil in the United States. The company’s financial highlights are as follows. Sales for the last 12 months were $1.63 Billion and a net income of $338.05 Million in the same period. Although sales have declined, the company was able to improve on its profitability ratios i.e. Net Profit Margin of 26.87% compared to 20.01% compared to the same quarter last year. Operating profit margin of 26.96% last year and a gross margin of 40.35% beat its competitors, including Dynegy Inc (DYN) and Enterprise Products Partners LP (NYSE:EPD) by a heavy margin. The Price Earnings ratio is adequate at 19.90, nearly the same as the industry’s average. Quarterly revenue growth might seem a little disturbing at the moment, however, no company is perfect, after all. Add to it a mouth-watering yield of 5.3% and the package is complete.
Buckeye Partners, LP (NYSE:BPL) owns and operates refined petroleum products pipeline systems in the United States. Currently the stock has an impressive yield of 6.48%, an outstanding one by any standard. The company has been successful in posting some impressive figures in its annual statements. Quarterly revenue growth, the latest measure of company’s performance, stands at 61.40%. Earning per share has grown at a rate of 72.40% from the same quarter last year, currently measured at 2.32. Sales have been convincing too in the last 12 months, showing a 78% rise. The PE ratio is balanced at 21.02, as the stock seems to be fairly priced. Liquidity position seems to be in no trouble, as current ratio and quick ratio stand at 1.14 and 0.5, respectively, both in line with industry averages. Hence, without a second thought, this stock is a definite buy.
NuStar Energy LP (NYSE:NS) engages in the terminalling, storage, and transportation of petroleum products primarily in the United States, Canada, the Netherlands, St. Eustatius in the Caribbean, the United Kingdom, and Mexico. The stock is yielding a terrific 7.70% yield, which is among the 5 best in the industry. In the background, we see a strong revenue growth of 41.30% compared to the last year’s same quarter, which is almost three times greater than S&P 500’s average. Current ratio and quick ratio look satisfactory; and both are nearly the same as the industry average.
Investment returns do not look awkward in any position either. Cash has been flowing in good and fast as the company received a net $119 million in hard cash last year. Compare the figures with a market capitalization of just $3.76 Billion; NuStar is truly the star of the show, outperforming much larger companies than itself.
YPF Sociedad Anonima (NYSE:YPF) raises the bar even further. Its stock is yielding a lusty 8.52%, a figure just too hard to resist. The oil and gas marketing and refining company has the investors drooling over its stock. To start with, the Price Earnings ratio of the company is only 10.23%, an indicator that you aren’t making a bad deal at all as you buy this stock. Registering a revenue growth of 28.80% and an income growth of 79.90%, the company’s profitability outlook is least of our worries. Current ratio and quick ratio are slightly below par, thus some doubts can be raised over the company’s liquidity position. The company has recently landed a big contract in Iraq and has made unusual oil discoveries near the Brazilian Coast. Thus, the company has some good business coming its way and we can rightly expect a continuation of current dividend yield levels.
Suburban Propane Partners, LP (NYSE:SPH) comes under the gas utilities sector. It also has an impressive yield of 7.30%. Sales and income have not been great this year as compared to the last. Profit margins are not really the most attractive feature for the company either. However, stable financial condition and adequate investor returns are things to be noted here. Return on equity and return on asset are nearly double the industry averages and close to those of S&P 500. Current ratio and quick ratio show both beyond mediocre figures, 2.5 and 2.1, respectively. Hence, a long-term investment in the company isn’t a bad idea.
Teekay Offshore Partners LP (NYSE:TOO) is not a hardcore energy stock. The company primarily provides marine transportation and storage services to the offshore oil industry. However, similar to other energy stocks, Teekay’s stock is providing some of the highest yields in the market, 7.5% to be exact. The company’s profitability is not too impressive right now and the quarterly revenue growth has only been 8.40% from last year. Income has dropped in last 12 months and sales grew by a negligible percentage. Financial condition is also doubtful, and the debt to equity ratio runs too high at 4.00. Current ratio is 0.7, casting some serious doubts on company’s liquidity. Nonetheless, investor returns follow the industry’s lead. Therefore, it’s no wonder this stock provides a great yield, but we advise you to be careful as you invest in it.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.