6 Oil and Gas Equities That Currently Yield Over 7%

by: Zvi Bar

Further to my recent exploration for high yield opportunities, such as the top 10 yielding Dow Industrials and 8 American mid-caps yielding over 3%, this edition contains 6 American small-cap oil & gas equities that offer a yield of over 7%. Half of the six are paying over 8%. They are also all below $2 Billion in market capitalization in an industry where the select few, well-known giants often gobble the small guys up.

Seven percent is nothing to sneeze at, especially when you consider that these stocks are dealing in oil & 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).
In fact, most of these companies have moved up quite a bit over the past two years, so 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 (NYSEARCA:SPY), which yields approximately 1.75%, and almost 3x the Dow Jones Industrial Average (NYSEARCA:DIA), which is yielding about 2.4%. Did I mention that 2 of the 6 are currently distributing 8.5%?
The following is a list of the 6 American small-cap oil & gas stocks that currently yield over 7%, listed in alphabetical order:
  1. Breitburn Energy Partners L.P. (BBEP)
    • Yield: 7.9%
    • Market Capitalization: $1.28 Billion
  1. Calumet Specialty Products Partners LP (NASDAQ:CLMT)
    • Yield: 8.5%
    • Market Capitalization: $814.6 Million
  1. Encore Energy Partners LP (NYSE:ENP)
    • Yield: 8.5%
    • Market Capitalization: $1.1 Billion
  1. Ferrellgas Partners LP (NYSE:FGP)
    • Yield: 7.7%
    • Market Capitalization: $1.86 Billion
  1. Martin Midstream Partners LP (NASDAQ:MMLP)
    • Yield: 7.6%
    • Market Capitalization: $824.5 Million
  1. MV Oil Trust (NYSE:MVO)
    • Yield: 8.1%
    • Market Capitalization: $474.6 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).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Yield is but one consideration when choosing a proper investment.

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