5 Dividend Stocks Primed For Steady Growth

by: Leonid Kanopka

I love to invest in positions that pay dividends, and believe they should be the staple to any good portfolio. Investment guru Warren Buffett and Jim Cramer both rant and rave on the importance of picking stocks that pay dividends. Another reason why I like dividend investing is because it provides a steady stream of income to live off, whether it is monthly or quarterly. Below are 5 stocks that pay dividends and are excellent companies to consider for a steady stream of income and steady growth:




Pengrowth Energy Corporation



Enerplus Corporation



Sabine Royalty Trust



San Juan Basin Royalty Trust



Provident Energy Ltd.



Pengrowth Energy Corporation (PGH) engages in the acquisition, exploration, development, and production of oil and natural gas reserves in the Western Canadian Sedimentary Basin. The current price is $10.02 with a 1 year price target of $12.75 (27.25% upside potential), not to mention a dividend yield of 8.3%! I like the fact that dividends are paid monthly, so you always have a steady stream of income coming in. PGH has an EPS of 0.52 with a P/E of 19.38 compared to the industry average of 14.18.

Enerplus Corporation (ERF) operates as an independent oil and gas producer. The company's property interests are located in western Canada in the provinces of Alberta, British Columbia, Saskatchewan, and Manitoba, as well as in Montana, North Dakota, Pennsylvania, Maryland, and Delaware in the United States. Enerplus operates a land base of approximately 420,000 net acres. The current price is $26.64 with a 1 year price target of $33 (23.87% upside potential), and this does not include yield from dividends that add up to 7.8% yearly. With oil-and-gas investments, you’re exposed to fluctuating commodity prices, but ERF does its best to mitigate that risk by maintaining one of the strongest balance sheets of its competitors. In addition, Enerplus carries on an active exploration and acquisition program to replace the oil and gas it pumps out of the ground, which makes this company a safe bet with a steady stream of income and no sign of the company going anywhere.

Sabine Royalty Trust (SBR) was founded in 1982, it receives a distribution of royalty and mineral interests from Sabine Corporation. Its royalty and mineral interests, include landowner's royalties, overriding royalty interests, minerals, production payments, and other non-participatory interests in various producing and proved undeveloped oil and gas properties in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. The current price is $65.57, and has a dividend yield of 6.5%. I also like the strong returns that SBR has brought investors over the past 5 years, which amounts to 15.4% total annualized rate-of-return (disregarding dividends). The last dividend payments have been 7/13/2011: $0.41, 8/11/2011: $0.40, 9/13/2011: $0.39, and 10/13/2011: $0.35 respectively.

San Juan Basin Royalty Trust (SJT) operates as an express trust. The trust has a 75% net overriding royalty interest carved out of Burlington Resources Oil & Gas Company LP's oil and gas leasehold and royalty interests (the underlying properties) located in the San Juan Basin in northwestern New Mexico. Current price is $23.64, and has a dividend yield of 6.8%. The current price is very close to the 52-week low of $20.42, which leaves room for a 18.4% upside potential towards the high of $27.99. Right now it seems like SJT is in a recovery phase, and is poised for growth towards $27 levels. The stock has recovered 15.7% from its recent low price of 20.42 which occurred in August 2011. The current price is above the 50 day moving average of $23.5, which could signal an uptrend could be developing.

Provident Energy Ltd. (PVX) was founded in 1993 and engages in the natural gas liquids (NGLs) infrastructure and marketing business in Canada and the United States. The current price is $9.02 with a dividend yield of 5.9%. PVX is very cheap, especially with its current dividend payment. The mean analyst rating is a "buy," and with the current yield and price I would agree. The stock has recovered 28% from its recent low of $6.9 on August 8, 2011. The current price for PVX is also above the 50 day moving average of $8.32, which could signal a developing upward trend, and with current dividend yields makes this a hard one to pass up.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.