Harry Domash's Winning Investing


 Three Beaten Down Dividend Payers 

During the recent market meltdown, many stocks got hammered for reasons unrelated to their fundamental outlooks. Here are three such stocks that caught my attention. All are high-dividend payers, meaning that youll get paid to wait even if it takes a while for their share prices to recover.  

Low Risk Dividend Payer
Communications Sales & Leasing (CSAL) is an April 2015 spinoff from rural telephone company Windstream Holdings. Prior to the spinoff, Windstream transferred its landline assets including transmission lines and associated equipment to Communications S&L, which, in turn, leases those assets back to Windstream.

The point of the transaction was to transform Windstream into a growth company focusing on data center operations. Communications S&L is organized as a real estate investment trust, which means that it doesnt pay federal income taxes, allowing it to pay high dividends. In fact, its currently paying dividends equating to a whopping 15.6% yield.

Communications S&Ls game plan was to diversify its customer based by acquiring additional telecom assets that it could lease back to the selling parties. However, CS&L took longer than expected to implement that strategy, making its first acquisition just last month. That delay, which frustrated shareholders, combined with the overall market downdraft, drove CS&Ls share price down by half since its IPO. However, CS&L has a solid balance sheet and analysts expect it to close additional acquisitions over the next few months.

Shipping Nat-Gas
Natural gas sells for less than $2 per million BTUs in the U.S. compared to around $5 in Europe. The only way to ship natural gas from here to there is by converting it to a liquid by freezing it, shipping it, and then defrosting at the other end. Natural gas in the frozen state is known as LNG (liquefied natural gas). GasLog Partners (GLOP) owns ships outfitted to transport LNG that it leases to shippers under long-term contracts. Shipping LNG is a fast growing business and GLOP participates in that growth by acquiring more ships.

GasLog, based in Monaco, is organized as a master limited partnership (MLP), which can complicate life at tax time. But, GasLog has elected to be taxed as a regular corporation, which eliminates that problem. However, most MLPs operate in industries such as oil pipelines or oil and gas production that have been crushed by falling energy prices.  

Although business is booming and it is financially solid, GasLog, being an MLP, has been tarred by association. Its unit (share) price has fallen almost 50% over the past 12-months. GasLog is currently paying a 14.7% dividend yield and expects to grow its quarterly payout around 12% annually over the next two years.

Fast Dividend Grower
Macquarie Infrastructure (MIC) owns and operates infrastructure properties including private airplane repair and fueling facilities, terminals for storing refined petroleum products, and a variety of utility assets. Long-term, Macquarie grows sales and cash flow at double-digit annual rates. But, year-over-year results are often lumpy. Its disappointing 2015 numbers drove its share price down almost 25%. However 2016 is shaping up to be a good year. For instance, already paying an impressive 8.1% dividend yield, analysts expect 14% dividend growth this year.

Those are my ideas. As always, do your own due diligence. The more you know about your stocks, the better your results.

published 2/19/16

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