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A Couple Of Juicy Yields From Mr. Market

Summary

Market Indigestion Handing Out Some Insane Yields.

How Low Can They Go?

Or A Better Question Might Be How High Can These Yields Go?

Whether or not this is a Bear Market or just a correction, there are always opportunities that seem to make sense with companies that are beaten down to what I consider ridiculous levels.

I'll just mention two in this post. For both of them you will get paid to wait, and at current yields you can afford to be patient.

1. CTL - CenturyLink with a yield on the Dec 17 close of over 13%. Yes there is a lot of debt but management seems to have a plan to shed non-core businesses and focus on their strengths for the future. They also have enough free cash flow to cover the dividend by a fairly wide margin. I think this is a buy anywhere below $17.

2. CCR - Consol Coal Resources LP, yielding over 12% on the Dec 17 close. Another case of plenty of free cash flow coverage of the dividend. Company has the highest quality anthracite and has sale contracts on most of its 2019 production. Whether or not there is a recession we will all be buying electricity. New markets in India where low quality coal has caused massive air pollution. Likewise I think this is a buy under $17.

Other writers here have done more complete research on both of these and it is not my intent here to call this a research article, but rather an exercise in intelligent selection of securities that have both a decent risk to reward while you get paid to wait and some decent upside.

When markets panic I like to see what is on the killing floor. These two are at the top of my buy list and I am in buy mode for both at anywhere near current prices.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in CTL & CCR over the next 72 hours.

Additional disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.