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6 Big Income Buys Now

08/23/2011 12:30 pm EST


Neil George

Editor, Profitable Investing

Regardless of the volatility, there are still some great long-term income picks you can buy now, writes Neil George of The Pay Me Strategy.

It’s important for income investors to have a small and select collection of companies like the ones below, that are in differing industries but have substantial real assets behind them that generate the cash to pay bigger dividends.

Otelco (OTT)
The telecom has a very sticky customer base for its broadband high-speed Internet data services, wireless communications networks, cable, and other data-fed television and on-demand entertainment, along with its traditional land lines.

Revenues keep coming. And while peers around the nation have faced plenty of pain from lost customers, Otelco focuses on making the most of its customer base by focusing on their wants and needs.

Moreover, it also knows that its capital is a crucial part of the business—so management has continued to keep a firm eye on attracting and keeping individual shareholders. To do so, it continues to pay its rock-steady dividend—currently over 10%—while also watching the revenues and the balance-sheet risk so that it can keep paying up.

The stock price has and will gyrate—but the performance continues to pay. Keep buying.

WP Carey (WPC)
Another example of a shareholder-focused company. The niche of sale-lease-back transactions with the major corporations of the world has built up an great and broad real asset collection of locked-in lease revenues for years to come.

And while the dividend is a bit less in the 6% range—the gains along the way more than make up for a strong real asset performance. Keep owning it.

Linn (LINE) and Holly (HEP)
Both of these energy names continue to be low-cost producers that are very risk-averse, both in business and financially. And with increasing dividends and good balance-sheet risk, both can continue to perform even as too many of their peers might well face challenges. Keep buying.

Natural Resource (NRP)
Right in the thick of the right energy. With nuclear development stalled for now, coal is king for fueling so much of the market’s need for power.

Royalties keep coming in, and without the operational risks of traditional mining companies, shareholders get all the cash and fewer troubles. Keep buying.

Enterprise Products Partners (EPD)
Last up is a company that is near impervious to even lower petrol prices. EPD merely distributes and processes. And along the way takes it cut on every bit that flows through their systems and networks.

Again, with a rising dividend that is a primary focus of the company’s management commitment, the company is a real asset buy.

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