Retirement Income: A Trio of "Mom-Worthy" Stocks


Igor Greenwald Image Igor Greenwald Chief Investment Strategist, MLP Profits

My parents recently sold their home and asked me to invest some of the sale proceeds to supplement the withdrawals from their retirement funds, notes Igor Greenwald, editor of Investing Daily's Personal Finance.

Their idea was to find "mom-worthy" stocks that would generate a better income yield than currently offered by banks, without taking on too much risk or volatility.

The first thing I did was buy her some Blackstone Group (BX). Blackstone far and away is the leading private equity firm and alternative asset manager.

Organized as a master limited partnership (MLP), Blackstone pays a variable distribution targeting 85% of long-term profits. The current yield based on the last four quarterly distributions is an annualized 6.3%.

And while there’s no guarantee the next year will prove similarly fruitful, the current bull market will be a big help on that score.

The stock seems to have recently broken out of a two-year consolidation, helped by Saudi Arabia’s recent commitment of $20 billion for a U.S. infrastructure fund.

But Blackstone hardly needs the Saudi money. It’s already managing $368 billion for leading global institutions that have beaten a path to its door based on results. The firm’s private equity funds have delivered a 19% average annualized return over 30 years. Buy BX below $38.

I also believe many investors are missing out on some great yields in the energy pipeline sector. Valuations have been hit by low energy prices, to an extent that provides an excellent entry point.

Enterprise Product Partners (EPD) is the largest energy midstream player and as usual, the best performing one in terms of business fundamentals.?
The most recent quarterly results showed gross operating margin up 11% year-over-year and distributable cash flow higher by 7%. Distributable cash flow was 30% above a distribution currently yielding an annualized 6.3% and growing 5% annually.

With its concentration in Texas, where the bulk of new drilling activity is taking place, Enterprise is poised to benefit disproportionately.