Most investors don't keep tabs on their companies' fundamental values. That's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home run stocks that provide the market's best returns.
We can help you keep tabs on your companies with MyWatchlist.com, our free, personalized stock-tracking service. Here are three dividend stocks for your watchlist.
1. Cheniere Energy Partners LP (AMEX: CQP)
Cheniere Energy Partners is a master limited partnership (MLP) with a distribution yield of 9% and is a subsidiary of Cheniere Energy (NYSE: LNG). MLPs have serious tax advantages for long term shareholders. The partnership owns and operates the Sabine Pass liquefied natural gas (LNG) receiving terminal in Louisiana. The terminal has a total send-out capacity of 4.0 billion cubic feed (Bcf) per day and five LNG storage tanks with a total 16.8 Bcf of storage capacity, making it the largest receiving terminal by regasification capacity in the world. Cheniere Energy still holds a 6.7% interest in the partnership. The terminal should do well as the U.S. produces more natural gas and begins exporting significant quantities around the world.
2. SandRidge Mississippian Trust I (NYSE: SDT)
SandRidge Mississippian Trust I was spun off in an IPO from SandRidge Energy (NYSE: SD) earlier this month and is expected to yield roughly 8% based on its first expected distribution later this year. SandRidge will retain a 38% stake in the trust. The trust owns royalty interests in 37 horizontal wells producing from the Mississippian formation in Oklahoma, as well as royalty interests in 123 horizontal development wells to be drilled in the Mississippian formation by SandRidge by the end of 2014. The royalty interest gives the trust 90% of the proceeds from the producing wells and 50% of the proceeds from the wells to be drilled. This is definitely one I'll be looking into further.
3. BP Prudhoe Bay Royalty Trust (NYSE: BPT)
BP Prudhoe Bay Royalty Trust was spun off from BP (NYSE: BP) in 1989. It yields 8.2%, making it one of the top 5 royalty trusts by yield. The trust also has the distinction as the best performing dividend stock of this millennium. As one would expect from the name, the trust owns interests in one of the largest oil fields in Alaska's Prudhoe Bay. The trust collects the proceeds from oil drilled in the area and as such it is highly correlated with the price of oil. For investors looking to make a long-term bet on oil, BP Prudhoe bay Royalty Trust is worth a look.
My Foolish bottom line
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
