Dividends4Life: Oil & Gas As A Dividend Investment

Oil & Gas As A Dividend Investment

Posted by D4L | Thursday, May 26, 2011 | | 0 comments »

Given paltry yields on savings and high-quality bonds, it's easy to see why dividend stocks are getting more attention these days. Though dividend-paying stocks have a much different risk profile than CDs or Treasuries, a well-diversified portfolio of quality dividend stocks can help boost your current income and provide income growth potential through dividend increases.

According to Capital IQ, energy stocks have been the best performing group in the S&P 500 over the past year, posting 27.9% returns as a group. Much of these gains can surely be attributed to the rise in oil and gas prices over the same period. Last May, crude oil traded for approximately $75 per barrel, and, despite recent volatility, it is changing hands at $100 per barrel today. Still, the industry has a lot going for it, including increasing demand for energy across the global economy. Large oil and gas companies also have a vast amount of infrastructure, specialized knowledge, and scale that provide them with competitive advantages and significant barriers to entry.

Source: Motley Fool

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