The Top 5 Income Stocks for 2012


These five high-yield stocks represent our favorite income ideas for the year... and they pay dividend yields of 7.5%... 8.8%... even 11.5%.

In this presentation, we'll detail our Top 5 Income Stocks for 2012 and will show you how to put these stocks to work in your portfolio...

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These five high-yield stocks represent our favorite income ideas for the year... and they pay dividend yields of 7.5%... 8.8%... even 11.5%.

In this presentation, we'll detail our Top 5 Income Stocks for 2012 and will show you how to put these stocks to work in your portfolio...

Dear Investor,

The numbers are simply jaw-dropping...

Income Stock #1 -- which I'll give you the name and ticker symbol of in a moment -- yields 11.5% right now. This stock gives you a stake in dozens of oil and gas wells in Oklahoma without having to own an acre of oil-soaked land.

Income Stock #2 is one of the most stable income investments we've ever found. It's the preferred stock of a company that invests only in securities backstopped by the U.S. government. This company borrows at unbelievably low short-term rates and invests in higher long-term rates offered by these government-backed assets. As a result, this stock has become one of the market's most consistent winners. During the 2007-09 bear market, this stock
gained 13%, while the S&P 500 fell -57%. One more thing -- right now these "worry-free" shares yield 8.8%.

Income Stock #3 give
s you all the benefits of being a landlord... without the hassles. This company owns property and collects rent, but you're the one who gets paid. The stock is yielding 7.0%, and its dividend payment held steady even during the housing crisis thanks to the special "recession-proof" properties it owns. In short, when you own what I like to call the "Walmart" of the housing sector, you know you're going to get paid no matter what.

Income Stock #4 owns oil pipelines and terminals across the United States. Thanks in part to the monopoly status it holds on these assets this company just saw its quarterly profit rise to a new record... 67% above one year ago.

That's great news for its investors, because this company returns every penny it can to shareholders. Since going public in 2001, this company has raised its dividends 205%... and now pays $3.20 per share in dividends every year. Meanwhile, over the past five years the shares have delivered total returns of 133%.

Income Stock #5 lets you own stakes in dozens of infrastructure monopolies across the entire world.

The partnership has a stake in electric grids in Chile. It holds railroads in Australia... ports all over Europe... coal facilities in Australia... toll roads in South America... and timberland in the United States and Canada.

Right now this stock pays $0.35 per share each quarter. That's a 27% increase over just the past year and gives the units a yield of 5.5%.

I'll tell you more about all five of these stocks a little later... including the name and ticker symbol of the oil company paying 11.5%. But first, I want you to know why it's worth your time to listen to what we have to say about these stocks.

After all, any "Joe" with a computer can write an opinion on a stock these days and get it in front of millions.

Well, my name isn't Joe. It's Paul Tracy. And I started StreetAuthority -- a financial publishing organization -- a decade ago.

Today, we publish our research to over 2 million readers in 175 countries. Our analysis has appeared on AOL, Forbes, Nasdaq, and Yahoo Finance.

Over the years, our business has grown like a weed. We now have two offices -- one in Gaithersburg, Maryland and another in Austin, Texas. We employ dozens of people, and we have analysts and researchers all over the U.S. and Canada.

And when it comes to income investing, I'm convinced StreetAuthority's expertise is second-to-none. In fact, we've built our reputation around dividend-paying investments.

StreetAuthority is the publisher of High-Yield Investing -- the most popular income investing publication in the nation. Right now, more than 36,000 investors rely on this monthly publication for analysis and updates on the market's highest-yielding stocks.

The advisory also includes two portfolios to track our progress -- including our popular "10%-Plus" Portfolio devoted solely to stocks yielding double-digits. Together these portfolios contain more than 40 ideas, and the vast majority of those are showing gains.

That includes stocks like Sunoco Logistics (NYSE: SXL), which is up 139.8% since the shares were added in April 2009. It also includes stocks like TransMontaigne (NYSE: TLP), which is yielding 8.0% and has gained 37.0% since shares were added. And then there is Legacy Reserves (Nasdaq: LGCY) -- it's up 59.9% since being added to the portfolio.

Not every investment our staff picks will rise, but I'd put our track record up against anyone in the nation. And our record has made our readers happy too...

Anthony L., of Quincy, Massachusetts puts it plainly: "High-Yield Investing is the best financial publication in existence, bar none. I have never written to any of the many publishing services I have used in the past, but yours puts them all to shame."

Richard G., of Centerville, Ohio puts it this way: "Even though I've been investing for years, I'm a newbie to income investing... and, I LOVE your letter."

Abe S., of Miami, Florida wrote saying: "I just received High-Yield Investing, and I wanted to let you know what a superlatively outstanding issue it was! Words almost fail me... but let me try a few, such as outstanding, superlative, incomparable, invaluable, best of breed."

But the truth is, while we dedicate enormous amounts of time, effort, and money into finding high-yielding stocks that we think will rise while also paying enormous dividends, our expertise alone isn't the only reason we've had so much success.

Dividend-paying investments have been one of the best places to earn solid returns in the market year after year -- and especially in this market. High-yielding stocks in general are experiencing a renaissance...

It's become one of the most overlooked segments of the market. Yet, it's also one of the most profitable.

For years now we've seen the market rise one day... only to fall the next. Meanwhile, events considered to be "once in a generation" -- credit crises, sovereign debt downgrades, and bailouts -- are now happening with surprising frequency.

In short, the volatility has been unprecedented. But it doesn't take a PhD to know that. What's surprising, however, is how many dividend payers have not only held up in this environment... but have prospered.

Even The Wall Street Journal is covering the news. Their headline says it all...

Dividend Stocks Become the Heroes
- The Wall Street Journal, December 19, 2011

And according to that article, in 2011 the 100 highest-yielding stocks in the S&P 500 were up an average of 3.7% -- before dividend payouts -- while the 100 lowest-yielders were down an average of 10%.

That performance is impressive, but buried deep within that same piece was the real reason to be excited about dividend payers -- not just this year, but for decades to come.

"Such stocks could get an even longer-lasting lift as more baby boomers reach retirement age -- and reduce their risk appetite. The first baby boomers turned 65 years old this year."

Right now we're seeing the first taste of what could be a tremendous time for dividend payers. Many investors, fed up with a wildly swinging market are seeking shelter in more stable dividend payers.

At the same time, the baby boomers are starting to look toward dividend-paying stocks to supplement their retirement income... especially when Treasury bonds yield just 2% and CDs and savings accounts pay nearly 0%.

That's pushing dividend payers up across the board...

You can see for yourself.

In the past year, shares of Philip Morris International (NYSE: PM) -- which yield 4.0% -- have returned more than 30%:

"Boring" phone company Verizon (NYSE: VZ) is dominating the market, thanks in part to its 5.0%-plus yield:

The Reaves Utility Income Fund (NYSE: UTG), a fund that holds a basket of utility and telecom stocks and pays a 6.0% yield, is having a great year:

MV Oil Trust (NYSE: MVO) pays 9.0%. It gives investors a stake in royalties from hundreds of oil wells:

Terra Nitrogen (NYSE: TNH) is up more than 70% in the past year and pays a 9.0% dividend yield:

Now, I'm not saying every dividend stock will beat the market. But I could find dozens -- if not hundreds -- more high-yielding stocks that are topping the S&P. I think the trend is clear -- dividend payers are one of the best places to make money in this market.

It makes sense. After all, companies that pay steady (and increasing) dividends tend to be strong, stable companies that can weather rocky environments like we're seeing right now. This is exactly the type of stocks investors flock to during times of uncertainty.

But even in good times these stocks still see buyers who snap up their shares. Their high yields all but guarantee that investors will be interested -- especially in a period when rates on Treasuries, savings accounts, and CDs are historically low. Why buy a Treasury bond yielding 2% when you can buy a high-yielder paying 8% AND beat the market?

That's why we're so excited about our Top 5 Income Stocks for 2012. If the market moves sideways or falls, we think investors will recognize these stocks as a great place to park money thanks to their stable and high yields. And if the market rises, we think these companies -- and the attractive yields they offer -- will go right along for the ride.

So without further ado, let me tell you more about this select group of high-yielders...

I told you earlier in this presentation about Income Stock #1. This stock is a royalty trust -- it provides ownership in a royalty stream from dozens of oil and gas wells in Oklahoma.

Simply put, energy trusts like Income Stock #1 exist solely to finance oil-producing wells... collect royalties from their production... and distribute those royalties to shareholders -- without having to pay sky-high corporate taxes to the IRS.

Most energy investments you find on the New York Stock Exchange are actually pretty complex. They are companies that own land, wells, derricks, and trucks. They have employees. They have to deal with spills, lawsuits, and cleanups. That's a lot to handle and still pump out a profit.

Take Chevron, for example.

In a recent quarter, it generated $64 billion in revenues... but $52 billion of that went toward employee salaries, marketing campaigns, administrative overhead and other operating expenses.

And then Uncle Sam took $5.5 billion in corporate taxes.

That still left a respectable $7.7 billion in pure profit. But Chevron pumped the vast majority of that right back into the business to find and develop new sources of oil.

Chevron is a complex oil giant, but this company is the exact opposite. The stock couldn't be any simpler... or more lucrative.

This stock -- SandRidge Mississippian Trust (NYSE: SDT) -- simply takes in royalties and then pays them out to investors.

SDT owns a stake in dozens of wells run by its parent company, SandRidge Energy (NYSE: SD). SandRidge Energy takes care of the drilling, production, marketing, and selling of the oil and gas produced.

The royalty trust -- SDT -- is passive in the relationship. It doesn't have to do a thing. In return for the initial investment when it went public, its investors get a cut of all the oil and natural gas sold from the wells.

To create SDT, SandRidge Energy packaged a 90% interest in 37 of its oil and natural gas wells in Oklahoma. In other words, for every dollar in oil or gas pumped by these more than three dozen wells, owners of the royalty trust are now entitled to 90 cents in royalties.

But that's just the start...

You see, most trusts simply package up some of their reliable reserves and wells, sell them to the public as a trust, and that's the end of the story. Those interests in the wells pay out steady dividends and not much changes.

But SDT is a different breed of trust. That's because in addition to the 37 wells it owned at its inception, the trust also gets a bonus. Between its inception in December 2010 and December 2015, parent company SandRidge must drill an additional 123 wells, of which SDT will own a 50% stake.

In other words, over the next several years each unit of this trust will have a stake in an increasing number of wells... meaning increased royalties and distributions.

Because the trust is so new, it has only made two dividend payments so far -- one of $1.07 per unit (for a longer than usual period of January through May 2011) and another for $0.82 per unit.

Dividends of $0.82 each quarter equate to a yield of 11.5% at today's prices.

But here's the best part -- the trust has significantly topped its projected distributions so far. In the recent quarter, when it paid $0.82 per unit, it had targeted a distribution of $0.66.

In other words, the trust topped its targeted distribution by 24%.

We have more details about SandRidge Mississippian Trust in my Top 5 Income Stocks for 2012 report.

In that report, we spell out everything you need to know about SDT, as well as all five of our favorite income stocks for 2012, including...

Top Income Stock #2 seemingly has a license to print money. This company simply borrows at low short-term rates and invests that money in mortgage-backed securities. Given the housing downturn, that might sound risky... but the securities this company buys are backed by Fannie Mae and Freddie Mac -- which are in turn backed by the U.S. government.

That backstop means this company's investments carry virtually no credit risk. In the past year, this company has taken in $230 million in revenues... and earned $151 million in net income -- for a net profit margin of 65%. For perspective, Apple (Nasdaq: AAPL), considered a bastion of profitability, has a net profit margin of just 24%. In other words, this company is 2.5 times more profitable than Apple.

And that profitability has paid off for investors... but we want to do one better. That's why we've selected the preferred shares of this company as one of our Top 5 Income Stocks for 2012.

These securities are rock-solid -- they actually saw a gain of 13% during the bear market, when the S&P fell -57%. Meanwhile, they pay out $0.105 per share each month, giving a yield of 8.8% at recent prices.

Top Income Stock #3 gives you all the perks of being a landlord... without the headaches. This company owns a "recession-proof" niche of housing communities made up of manufactured homes and RV resorts. Sure it's not fancy, but these communities are prospering while the "regular" housing market is under pressure.

I like to call this company the "Walmart" of housing. Walmart is the lowest cost provider for thousands of products. And when the economy turns south, people don't stop shopping there... if anything, Walmart ends up seeing more customers. That makes Walmart a smart place to invest in a downturn.

This company follows that same principle, except with housing. No matter the economy, people need a place to live. And because it focuses on manufactured housing communities and RV resorts, which offer some of the cheapest housing available, this company sees steady demand no matter what the economy is doing.

In fact, this company owns about 150 communities and has increased year-over-year revenues going all the way back to 1991. Remember, that time period includes two major recessions.

But what we're most interested in is the company's steady dividend. Since it started making payments in 1994, this company has never missed a dividend or lowered its total annual payments.

Today it is paying investors a quarterly dividend of $0.63 per share. That comes out to a 7.0% yield, making this one of our favorite  income stocks for the coming year.

Top Income Stock #4 is as "no-worry" as they come.

Many of the stocks we've already told you about hold up in downturns and keep on churning out dividend payments to their investors. In short, if you're worried about the roller-coaster market (or simply tired of it), the stocks that make up our Top 5 Income Stocks for 2012 are the sort of securities you want to own. Not only do they see less volatility than the broader market... but these investments also pay out fat dividends while you are able to sleep easier at night.

But this stock's business might be the most stable of them all...

It's vital to your day-to-day life, but I doubt you even know this company exists. It owns pipelines, terminals, and storage facilities throughout the United States. This infrastructure ships and stores gasoline, diesel, crude oil, and jet fuel. More importantly, the company has a monopoly on these assets -- no one can simply come and build another pipeline to compete. That means its business is as steady as it gets.

In return for moving and storing these products, this company earns steady fees... that it then passes on to investors. Since going public in 2001, this company hasn't missed a dividend, and it has increased the payment more than 35 times.

That's helped attract investors, and the shares have seen a total return of 133% during the past five years. We think the stock is poised for another solid showing in 2012. Right now it yields 5.0%... and we're expecting more dividend increases.

Top Income Stock #5 is one of the market's best-kept secrets. 

This stock trades less than 500,000 shares a day (just a tiny fraction of what some well-known names see in a day). But if you own shares of this company, you own a basket of monopolies from around the world.

In total, 80% of the partnership's revenues are under contracts or are regulated. Meanwhile, those practically guaranteed revenues are coming from one of the most compelling portfolios I've ever seen.

The company has a stake in electric grids in Chile. It holds railroads in Australia... ports all over Europe... coal facilities in Australia... toll roads in South America... and timberland in the United States and Canada.

I can only think of one, maybe two, other places where you can invest in a stable group of monopolistic holdings this broad from all over the planet.

Meanwhile, right now this stock pays $0.35 per unit each quarter. That's a 27% increase over just the past year and gives the units a yield of 5.5%.

As we said earlier, we think income stocks represent one of the best ways to make money... in UP or DOWN markets.

With an average yield of 7.5%, the 5 stocks we've included in our Top 5 Income Stocks for 2012 report offer our best income ideas for the coming year. Better yet, thanks to their recession-resistant business models and monopoly positions, many of these stocks represent the most stable high-yield investments available.

If this type of "worry-free" performance is what you're looking for, then you need to get the names and ticker symbols of all 5 of these stocks.

I've already provided you with information about SDT -- the first of our Top 5 Income Stocks for 2012. For the remainder of the stocks on our list, we've put together an exclusive online report for readers of our monthly High-Yield Investing advisory.

High-Yield Investing is the most popular income investing advisory in North America. Each month, Chief Strategist Carla Pasternak covers the most attractive -- and highest-yielding -- investments in the United States and Canada.

This newsletter is for those who want solid, regular paychecks (monthly or quarterly) AND a high chance of seeing capital gains (right now, more than 70% of Carla's current High-Yield Investing holdings are showing a gain).

And simply put, we think Carla is second-to-none when it comes to income investing.

Before joining StreetAuthority, Carla wrote annual reports for public companies. She earned her income investing stripes after years of poring over notes to financial statements and teasing out where the money came to pay dividends. She worked face-to-face with the CEOs of many junior oil and gas startups that have grown into major energy producers.

Carla has also taught college business courses in her adopted hometown of Calgary. But her professor days are over, at least for now. "I've decided to give up teaching, because my newsletter is occupying so much of my time and energy. I figure I'm teaching subscribers how to find safe high-yielding companies that are strong enough to deliver capital gains, too, so I'm still teaching in a way."

Meanwhile, Carla also holds a wall full of advanced degrees -- including an MBA from the University of Calgary and a Ph.D. from the University of Wisconsin.

So far, the readers following Carla's work during the nearly decade we've published High-Yield Investing seem to have enjoyed it...

"You have a terrific service. I am one guy you will never lose as a subscriber."
-- John A., Wellesley, MA

"In my somewhat confused mind I imagined that a financial advice service had to cost zillions to be worth anything. I even paid out $5,000 for the 'ultimate service' of a competitor. I look for their reports each month with mild interest, yet feel something akin to excitement when I see your issues sitting in my email. Your High-Yield Investing service must be the best value out there as a reflection of its content, superb commentary and suggestions, and depth of study. Thanks!"
-- Garry C., Springfield, VA

"I have made more money in retirement than I did when I was working. Income from dividend-paying stocks (which I collect every month) is even better than my greatest expectations."
-- William B., Newport News, VA

"StreetAuthority has helped me make the cash flow that my wife and I require in order to retire with the same income we had during the working years. Thanks for your help."
-- Theodore F., Cumming, GA

Best of all, you can try High-Yield Investing, read my Top 5 Income Stocks for 2012 report, read Carla's latest issue, and see for yourself what you think.

Right now we're offering new subscribers to High-Yield Investing the chance to give the advisory a "test-run" for the next 30 days, risk-free.

Start your 30 days now, and you'll receive the following with a one-year order:

12 Issues of High-Yield Investing -- Each issue includes full analysis of Carla's favorite income plays... plus her "High-Yield Stock of the Month" -- the single high-yielding security Carla likes most.

Instant Access to High-Yield Investing's Full Portfolio Holdings -- To track her results, Carla adds her favorite securities to one of two model portfolios. This includes her "10%-Plus" Portfolio, which is only for securities paying double-digit yields. And her "Dividend Optimizer" Portfolio holds some of the most stable dividend payers on the market, with yields anywhere from 3.5% to 9.9%.

Report #1: The Top 5 Income Stocks for 2012 -- You'll have full access to the names and profiles of the five stocks we've identified as the best income stocks for the coming year. These stocks are paying yields as high as 11.5%, and on average they pay 7.5%. You'll receive their names, ticker symbols, and our full analysis.

Report #2: Carla's Cash Cows: Great Companies with 10%+ Dividend Yields -- If double-digit yields make your heart pound faster, then this report is for you. It reveals where you can get yields of up to 10.0% right now.

Report #3: High-Yield Winners: Stocks with Hefty Dividends and the Cash to Keep Paying Them -- These three securities represent some of the world's soundest income-investing opportunities. In addition to their rich yields, they are all issued by companies with enough cash to keep paying as far out as we can project.

If you decide to join High-Yield Investing for two years (with the same 30-day money-back guarantee), then you'll also receive several additional reports...

Report #4: Pipelines of Profits -- If you've never heard of master limited partnerships, it's time to listen up. In this report, we cover every major type of partnership, including one that owns the world's longest petroleum pipeline and that has relentlessly hiked its dividend since its launch 19 years ago... and another one that is up 742% in 10 years.

Report #5: Real Estate You Can Trust--High-Yielding REITs with Recession-Proof Dividends -- After carefully screening all 192 U.S.-traded REITs, paying attention to each portfolio of properties, its growth prospects, and its valuation levels, these are our picks as the best long-term winners.

As I said, through this offer you have a chance to receive all of the special reports we just outlined, plus try High-Yield Investing risk-free for 30 days.

If you don't like it, we won't get our feelings hurt. Simply call our dedicated customer service team before 30 days is up and we'll send you a 100% refund. You'll be able to keep the reports, free of charge.

The masthead price for High-Yield Investing is $99 per year. That's because we put an enormous of time, money, and effort into our company's research. We have to recoup our costs.

But sign up through today's offer and you can start your 30-day test of High-Yield Investing for 60% off.

You'll pay just $39.95 for one year of our monthly income advisory.

Keep in mind this is the lowest price we've ever offered for High-Yield Investing. Meanwhile, your subscription will come with all the benefits listed above AND you'll have 30 days to try the service out for yourself.

But I can't guarantee that this service is right for you. It's a special service designed for investors who want to take control of their portfolios, and who are serious about locking in above-average dividend yields.

If you're tired of settling for disgustingly low Treasury yields, then try High-Yield Investing at no risk. If you don't like it, simply call our dedicated customer service team before the 30 days is up for a 100% refund.

To receive instant access to High-Yield Investing, subscribe now.

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All the best,

Paul Tracy
Co-Founder,  StreetAuthority  

Disclosure: Paul Tracy owns shares of PM, UTG, BIP, and SDT. StreetAuthority owns shares of PM, UTG, BIP, and SDT as part of the company's various "real-money" portfolios. In accordance with company policies, StreetAuthority always provides readers with at least 48 hours advance notice before buying or selling any securities in any "real money" model portfolio.

(C) Copyright 2012 StreetAuthority, LLC. LEGAL DISCLAIMER: Please note that we are not a registered investment firm or broker/dealer. Readers are advised that the material contained herein should be used solely for informational purposes.

We urge you to always conduct your own research and due diligence and obtain professional advice before making any investment decision. StreetAuthority will not be liable for any loss or damage caused by a reader's reliance on information obtained on our web site. Our readers are solely responsible for their own investment decisions.

Figures shown in the preceding presentation represent returns for individual stocks only. All investments can be volatile, and all returns will be reduced by fees and expenses. Below are the returns for StreetAuthority's High-Yield Investing.
(Model Portfolios)
Average Returns of
Current Portfolio Holdings*
Current Holdings Showing Gains Current Holdings Showing Losses
High-Yield Investing +25.2% 30 12
* as of December 13, 2011