Thursday, March 29, 2012

Any kind of energy!

Dividend Machine for week of March 26, 2012 - WPZ
I am crazy about this stock.  I like it so much that I recently added to my personal position. Energy in every form is needed today and will be in the future.  After all, the sun is just a ball of energy.

            Williams Partners is a master limited partnership and these were very hot in 2011.  In the past, master limited partnerships had income advantages for those who own the shares in a taxable account.   You can own them in a retirement account as well although if you own a lot, you should consult your tax adviser about some tax details.

            Partnerships of this type pay out most of their earnings and Williams Partners, WPZ, is no different.  In addition to liking it because I like the energy space, WPZ meets all our dividend machine criteria as you can see from the table provided below.


Price when profiled
Last 4 Qtrs Earnings
Last 4 Qtrs Dividends
Current Qtr Dividend
Annualized Div Yield
No. Years Div Increase
Debt/Equity ratio

            WPZ has some calls available that would make you money, but they are not paying quite as much as I would like.  I am adding WPZ for the 5.46% yield and I would need to make at least ten percent on a call to risk losing the yield. The table below illustrates that today’s calls were just too cheap.  This is based on a June, 2012 call.

Strike Price
Cost Basis
Call Premium

Gain in $ if assigned
Call Yield
Gain Yield
Total Gain Yield

            Even without the call income, WPZ may be a very good fit for the income producing portion of your portfolio.
Very Truly Yours,