Ask Matt: What energy pipeline stocks pay large dividends?

ByABC News
January 25, 2012, 8:11 PM

— -- Q: What energy pipeline stocks pay very large dividends?

A: Investors are squeezing just about any investment they can get their hands on looking for yield.

It's easy to see why. With interest rates on savings accounts and certificates of deposit scraping along at just 1%, people who need income from their investments to live on are struggling.

Meanwhile, yields on government securities are stubbornly low, stealing away what's been a popular form of income for retirees for decades.

Along with preferred stock, municipal bonds and mortgages, shares of energy pipeline stocks are high on the shopping lists of investors looking for income. These companies tend to pay very large dividends relative to the Standard & Poor's 500.

These companies have large networks of pipelines used to transfer energy. They collect stable cash flows from their customers. Since demand for energy is relatively predictable and recession resistant, they tend to keep paying fat dividends and can often afford to raise these dividends.

The list of such energy pipeline companies, and related energy companies with relatively high dividend yields, is a pretty long one. Below are some of the key players and their current dividend yield.

Keep in mind that not all the stocks on the list are pure energy pipeline companies. Some are involved in other areas of transporting or storing energy. All have substantial dividend yields in common.

If you'd like to learn more detail on what each of these companies do, click on the ticker symbol below:

Source: S&P Capital IQ, USA TODAY research

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Follow Matt on Twitter at: twitter.com/mattkrantz