The Best Natural Gas Stocks Pay Dividends

Yesterday, I took a little time to cover the best natural gas ETFs available for retail investors. But those ETFs give exposure to the commodity itself. If you want to bet on the companies producing, compressing, or transporting it, you need different vehicles. And with natural gas prices so depressed, right now is the absolute best time to pick up the best natural gas stocks with dividends that are soaring sky-high. So today, we’re going to talk about what’s got prices down, why they’re likely to rebound with a vengeance, and how you can play it by investing in the best natural gas stocks with dividends…

The Best Natural Gas Stocks With Dividends: Down but Not Out

Now, before we get into the actual stocks themselves, there’s a little bit of preliminary coverage we need to get out of the way. I need to explain why the best natural gas stocks with dividends are yielding so much cash for investors right now. But that’s a pretty easy thing to explain. The stock prices are down and the dividend payments have remained relatively steady. Since yield is the number you get when you divide the payment by the price, as the price falls, the yield rises. But why are the best natural gas stocks — with dividends, no less — falling in a market that’s going up? Well, that’s easy too. It’s because natural gas prices are lower than they typically are this time of year. And why’s that? Well, it was an unusually warm winter and we’ve got a lot more natural gas left over than usual. So even though people are burning up that natural gas to cool off their houses this summer, there’s a lot of it to go around. And since the laws of supply and demand are pretty inflexible, more supply for the same demand equates to lower prices…

But the thing is that while these prices — and, by default, the prices of the best natural gas stocks with dividends — are low now, they won’t be forever. But since the prices are low now and the companies are still paying out those lucrative dividends, the yields on cost are out of this world! And by investing in the best natural gas stocks with dividends now, you can lock in that high yield AND cash in on the price rally later on. And the reason I know there’s going to be a rally later on is the same as it was yesterday: We need natural gas to power the future. There is no future of energy without BOTH fossil fuels AND renewable energy. We simply can’t produce enough of either to supply the demand we’re going to have. So while the best natural gas stocks with dividends are down but still paying up, the smart move is to pick some up now…

The Best Natural Gas Stocks With Dividends: The Search for the Source

And one of the best natural gas stocks with dividends is one of the nations top oil and gas exploration and production companies, Civitas Resources Inc (NYSE: CIVI). Civitas is on the smaller end of the major oil and gas producers, with a market cap of just under $7 billion. For comparison, that makes it about 71 times smaller than Exxon Mobil. But it’s still a very big company and it’s growing quickly thanks to its exposure to lucrative fields across the American Southwest. And while big companies like Exxon will pay you around 3% on your investment, Civitas shells out a very, very impressive yield of neary 9%. That’s $6 per share per year and it adds up to billions of dollars in income payments for shareholders. And that’s why this exploration and production company is one of the best natural gas stocks with dividends.

The Best Natural Gas Stocks With Dividends: Special Delivery

But the thing is that natural gas doesn’t always come from the same places it needs to be used. So before anyone even thinks about burning some to cool off the house, it’s got to be transported from a field to a place you can access it. And that’s where midstream companies come into play. They help the producers connect to the refiners though things like pipelines. And they help the refiners connect with customers by transporting liquefied petroleum gas all over the world in their fleets of specialized tankers. And another of the best natural gas stocks with dividends falls into this category. In fact, it’s almost synonymous with natural gas. Even its ticker symbol is the abbreviation for liquefied petroleum gas: LPG. It’s called Dorian LPG Ltd. (NYSE: LPG) and it’s one of the few companies that has the equipment it takes to get natural gas across an ocean with its fleet of 25 very large gas carriers. Thanks to the drop in share price and the resilience of its payments, the stock is yielding nearly 10%, as management shells out $4 per share per year (or $170.48 million). And since that $4 only uses up around 50% of the company’s profit, it could easily grow as the market turns. And the possibility of both dividend and share price growth definitely make this one of the best natural gas stocks with dividends.

The Best Natural Gas Stocks With Dividends: For Refined Investors

And finally, we get to the third and final stock on my list of the best natural gas stocks with dividends. We’ve already covered the beginning of the process with exploration and production company Civitas. And we’ve got delivery covered with Dorian LPG. But there’s another step in the natural gas process that we’re missing. And that’s the refining stage of the game. Because natural gas doesn’t come out of the ground in the form you get it delivered. It’s got to be refined before it can be marketed to consumers. And that’s exactly what this company does. Its name is CVR Energy Inc. (NYSE: CVI), and it provides the missing piece of our puzzle: refining and marketing. CVR owns two refineries where it processes and has an over 100-year history of supporting the oil and gas industry. And thanks to depressed prices, it’s got a dividend yield hovering near 9% as it shells out $200 million a year to investors. It’s also only paying out about 30% of its profits, so there’s lots of room for dividend growth here, too. Because it provides a pivotal service in the market and could give both capital appreciation and growing income, it should make every investor’s list of the best natural gas stocks with dividends.

The Bottom Line

The bottom line here is that the best natural gas stocks are the natural gas stocks with dividends. They give the opportunity for both steady (and growing) income plus capital appreciation as the market corrects. And I’m not the only one who thinks so. In fact, my colleague, energy investment expert Keith Kohl at Energy and Capital, just also covered this same topic. And he’s got a list of some of the other best natural gas stocks with dividends you should check out, too.

And once you’re done learning all about the best natural gas stocks with dividends, don’t forget to keep learning about the next stocks everyone will be talking about and the next investment trends everyone will be searching for by becoming a member of our investor community if you aren’t already. Then, once you’ve taken care of that, have a great weekend!

To your wealth,

Jason Williams

@TheReal_JayDubs

Angel Research on Youtube

After graduating Cum Laude in finance and economics, Jason designed and analyzed complex projects for the U.S. Army. He made the jump to the private sector as an investment banking analyst at Morgan Stanley, where he eventually led his own team responsible for billions of dollars in daily trading. Jason left Wall Street to found his own investment office and now shares the strategies he used and the network he built with you. Jason is the founder of Main Street Ventures, a pre-IPO investment newsletter; the founder of Future Giants, a nano cap investing service; and authors The Wealth Advisory income stock newsletter. He is also the managing editor of Wealth Daily. To learn more about Jason, click here.

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