4 More Oil and Gas Companies With Monthly Dividends

You know what's better than a dividend stock? A dividend stock that pays you every month. Last week, I identified five oil and gas companies with monthly dividends. Today, based on some recommendations from readers on my previous article, I have five companies focused on oil and natural gas whose monthly dividends could provide you with the income needed to meet your monthly obligations or provide you with steady capital to reinvest and grow your portfolio.

Company

Recent Monthly Payment

Current Yield

Pengrowth Energy (NYSE: PGH  ) $0.069 8.3%
Cross Timbers Royalty Trust (NYSE: CRT  ) $0.268 6.9%
Hugoton Royalty Trust (NYSE: HGT  ) $0.083 6.3%
Sabine Royalty Trust (NYSE: SBR  ) $0.305 5.6%

Source: Yahoo! Finance.

What's a royalty trust?
All four companies on the list are royalty trusts. A royalty trust is similar to a REIT, but instead of real estate or mortgages, income is derived from oil and gas rights. With this special situation, however, comes special tax reporting requirements, so be aware of that prior to purchasing royalty trusts. They also deplete over time, so the income is not guaranteed to last beyond the life of the trust.

Cross Timbers and Hugoton Royalty Trusts both provide investors with profits from the natural gas producing assets of XTO Energy, a subsidiary of Exxon Mobil, which purchased XTO in 2010 to add to its natural-gas-producing assets in North America. Sabine Royalty Trust provides income from the properties of Sabine Corporation in Florida, Louisiana, Mississippi, New Mexico, Oklahoma and Texas. The trust has been making monthly distributions since January 1988.

Oh, Canada!
Like Baytex Energy and Provident Energy, which I mentioned last time, Pengrowth Energy is a Canadian company slightly different from the U.S.-based trusts on this list. While it pays proceeds similar to a traditional royalty trust, it also focuses on the exploration and production of oil and natural gas. Its largest production comes from locations in the Montney and Horn River shale areas in northeastern British Columbia and western Alberta.

Dividends are great
Though these aren't dividend payers in the traditional sense, their monthly dividend-like distributions could be used to pay some monthly expenses. In addition, they are a nice way to get some exposure to oil and natural gas in a world defined by fossil fuels. If you are looking to diversify your portfolio with income-generating stocks, be sure to get a copy of our free report to "Secure Your Future With 11 Rock-Solid Dividend Stocks." Even though none of the included companies pay monthly dividends, it should still be worth your while to get your copy today!

Fool contributor Robert Eberhard holds no position in any company mentioned. Follow him on Twitter or click here to see his holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On February 21, 2012, at 8:11 PM, gcmagone wrote:

    Your chart does not do justice to Sabine (SBR). That 5.6% figure was the low for the year because of ad valorem taxes paid that month. The average annual yield on SBR falls in the 6.5% range. Moreover, it happens to be the best diversified having acreage in five states.

  • Report this Comment On February 21, 2012, at 9:52 PM, XMFGuruEbby wrote:

    I noticed that when looking at the entire dividend history. Hopefully it will return to higher yields this year, especially if natural gas prices go up.

    Thanks for reading!

    Robert (TMFGuruEbby)

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