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Energy for Retirement

Written by Jason Williams
Posted October 12, 2017

When you get right down to it, an investment in energy is an investment in everything we do. The alarm that wakes you up; the coffee that gets you going; the car, bus, or train that gets you to work; the food that fuels your body... Almost every part of our lives requires energy.

It’s the most ubiquitous investment in the world. It truly plays a part in every aspect of our lives.

And investments in energy companies are often the most profitable... in good times and bad.

Profits in Every Market

You see, energy stocks are some of the most reliable income-generating investments ever. Utility stocks are known as the investment of widows and orphans. That’s because they provide steady, reliable income year in and year out.

In bull markets, they deliver stellar gains along with the steady income. And in recessions, they’re the last stocks to drop and the first to come back up.

When times are tough, investors pour money into these kinds of companies. That’s because they know these are the companies that will withstand the test of time. They’re the ones that’ll come out of whatever bear market we’re in unscathed. And they’re the ones that will keep paying investors reliable dividends throughout the tough times.

Forever Investments

When it comes to planning for retirement, it’s been shown time and time again that the best strategy is to invest in companies that pay dividends. And among those dividend-paying companies, the ones that perform the best for investors are companies that are constantly growing their dividends.

dividend growers

As you can clearly see, the best of the best — the ones delivering the highest returns — are stocks with growing dividends.

These are the kinds of companies you hold onto forever. They’ll boost your gains while you prepare for retirement. And they’ll pay you monthly income while you enjoy the retirement you worked so hard to attain.

So Many Options

And it’s surprisingly easy to find them, especially in the energy industry. Some of the most tenured of the dividend growers are oil and gas companies. Most oil services companies pay some kind of dividend.

Most companies in the industry have preferred shares that pay regular income. And then there are the MLPs and royalty trusts. These are investments literally set up to pay income to investors.

MLPs, or master limited partnerships, provide quarterly distributions to shareholders much like a dividend payment. But in the case of an MLP distribution, the money you receive is treated as a return of capital and not income when it comes time to pay taxes. That means you get to pay the lower capital gains tax as opposed to the much higher personal income tax.

Royalty trusts are just that — they pay investors royalties on the profits from sales of oil, natural gas, solar energy, etc. They’re not companies in that there are no operations and very few employees. There’s a management board responsible for tracking profits and distributing payments to shareholders. And they offer some of the highest yields on the market.

Let’s Get Started

Now, you’ve got an idea of the kind of profits you’ll see from dividend investments. You understand how important they are when it comes to having income in retirement. And you know that there are tons of options out there for getting some income into your energy investments.

So, let’s take a look at a few investments that will pay you income and boost your profits for years to come...

Let’s start with a solid (and high-yielding) MLP. Williams Partners L.P. (NYSE: WPZ) is an energy infrastructure company. It’s got a hand in pretty much every part of the oil and gas life cycle. It helps producers gather, treat, and compress newly recovered oil and gas. It provides for transportation and processing. It’s even involved in the marketing of final products.

And it pays investors a very nice 6.09% quarterly payment. That’s $2.40 per unit per year. And it’s paid that dividend steadily since it was started in 2005. You’re not going to get blazing rallies in the stock, but you can depend on those payments hitting your bank account every three months, no matter what.

Next up, let’s go with a dividend grower. It’s a name you’re probably very familiar with: ExxonMobil (NYSE: XOM). But you might not know that Exxon has one of the longest-running dividend programs in the market. It’s been paying investors steady income for more than a century.

Exxon started paying a dividend back in 1911. And it’s managed to keep those payments going through multiple market collapses including the Great Depression.

The company has also been raising that dividend payment every year for the past 35. Even during the Great Recession and the recent rout in oil prices, XOM kept giving investors raises. In fact, it’s averaged a 6.4% annual growth rate. That’s just what you want in your energy income portfolio.

The stock currently has a 3.74% yield — that works out to $3.08 per share per year.

Finally, I’ve got an investment for those of you who want to have a little skin in as many games as possible. It’ll give you investments in 33 different dividend-paying players in the energy market. You get exposure to exploration and production companies, midstream transport companies, refiners, even companies that sell to the general public.

And the best part is that you get to collect a dividend yield that’s a combination of all 33 of those payments. The Energy Select SPDR Fund (NYSE: XLE) pays investors a 5.06% yield that works out to about $3.46 per unit per year. And it’s been paying those quarterly distributions since the fund’s inception back in 1999.

Coming Soon to a Portfolio Near You

These are just a couple of energy income investments to get you started. But there are many more out there.

Finding stocks that generate lasting (and growing) income is one of my specialties. And it’s the backbone of my own investment strategy. I co-run a service called The Wealth Advisory, where we clue investors into the best income-generating investments in the market. Our readers are invested in companies that are going to be paying out a growing stream of income for decades to come.

And it’s because of that strategy that Keith Kohl has asked me to help him create a portfolio of the absolute best income-generating energy investments on the market. We both want you to have access to the kind of stocks that will secure your retirement and make sure you’ve got plenty of money coming in after you stop working to not only support your lifestyle but also provide a nest egg to pass on to your children.

It’s going to take lots of research and many late nights crunching numbers, wading through balance sheets, interviewing executives, and probably traveling to check out operations. But it’s all worth it knowing you’ll be able to build a portfolio that’ll get you to your goal of a comfortable retirement that much quicker.

And once we’ve got all the stocks figured out, you’ll be the first ones to get access to this portfolio of all-star income-generating energy stocks.

So, keep an eye out for our email.

Until then, get your feet wet with the three companies I outlined above. I’m sure they’ll boost your returns and whet your appetite for more income.

To your wealth,

Jason Williams
Energy and Capital

Follow me on Twitter @AllBeingsEqual

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