3 Rock-Solid Income Opportunities

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It's true what they say: You have to spend money to make money. However, that doesn't mean you have to toil and sweat for every last dime. Instead, consider investing a little of your extra money into income-paying stocks and let them fuel some income into your bank account.

Dividend stocks can be very profitable for investors. It's as simple as that. While they don't garner the notability of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most people imagine. With this in mind, our analysts at The Motley Fool sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks. If you'd like to discover the identities of these stocks, we've developed a valuable free report that's available by simply clicking here now. In addition to the stocks in that report, I've compiled three more bonus selections of my own. Let's take a look.

The mature way to invest in oil and gas
Exploring for and finding a gushing new supply of oil and gas is both exciting and risky. It also costs a whole lot of money. That's why many oil and gas companies will sell off older, more mature wells to fund future exploration ventures. This is where Vanguard Natural Resources (NASDAQ: VNR  ) will step in and buy up those older wells.

By removing the exploration risk, and then hedging the production to remove commodity price risk, Vanguard can become an income machine. In fact, the company currently distributes a monthly payment to its investors that when annualized equates to a 9% yield. That's a yield that would make any bank account blush. Finally, with 175 million barrels of oil equivalent reserves, Vanguard has years' worth of oil and gas to keep paying its investors each month.

Get paid to endure the pain from the pump
Sticking with the oil and gas theme, ConocoPhillips (NYSE: COP  ) pays its investors about 1% each quarter, which is their share of the profits from the oil and gas that Conoco produces. Over time that payment should rise, as the company has a stated goal to grow its oil and gas production by 3%-5% per year, while also growing its margins by the same rate. What that means is it should have more than enough income left over each quarter to gradually pass an even greater amount back to its investors.

Money can grow on trees
When I was a kid, my parents used to tell me that money doesn't grow on trees. It's funny to think back about those times, because now I know about timber REITs such as Weyerhaeuser (NYSE: WY  ) . The company owns more sustainable forestland than any other timber REIT, which it uses to support its more than 3% dividend.

What's great about Weyerhaeuser is that it has a substantial amount of its acreage in the Pacific Northwest, which puts it in a prime position to access the Asian export markets. In fact, Weyerhaeuser really stands above its nearest competitor, Plum Creek (NYSE: PCL  ) . While both own more than 6 million acres, about 2.5 million of Weyerhaeuser's acres are in the Pacific Northwest, which is about 2 million more acres than Plum Creek has in the region. That's a sustainable competitive advantage that will enable Weyerhaeuser to get better prices for its timber, which will lead to a sustainable long-term rise in its dividend. That's income that's not only rock-solid, but deeply rooted as well.

Final Foolish thoughts
Oil and trees might not be the most exciting investments in the world, but the rock-solid income makes such a great foundation for any portfolio. These are just a sampling of the rock-solid income opportunities that are just waiting to displace the paltry income that savings accounts are paying these days. For a list of some other rock-solid income stocks, don't forget that free report filled with other great companies -- which is available by simply clicking here now.


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  • Report this Comment On September 04, 2013, at 2:07 PM, wazoo1943 wrote:

    Regarding Weyerhaeuser & Plum Creek, it seems that with ocean shipping so cheap, there is little advantage to Northwest timber over, say Southern timber. Southern timber grows three times faster and is easier to harvest and replant. Any timber that has easy coastal port access will be "fungible". I prefer PCLs geographic diversity and long track record of stable, sensible management and strategic real estate purchases and sales.

    I am long PCL.

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