Global demand for liquefied natural gas (LNG) is expected to double by 2025, and that has investors looking for the best LNG stocks to buy now.
But it's not just stock performance that can be enticing for LNG investors. Many LNG stocks offer their shareholders hefty dividend yields as well - some close to 7%.
Dividend-paying stocks typically outperform non dividend-paying stocks by a wide margin. Data from Ned Davis Research points out that dividend stocks annually outperformed non-dividend stocks by 8% from 1972 to 2012.
Dividend-paying LNG stocks are a great way to invest in a quickly growing market, while also supplementing returns with quarterly payouts.
Here are six of the best LNG stocks to buy now for investors who want yield as well as share-price growth.
Six of the Best LNG Stocks Paying a Dividend
Energy Transfer Partners LP (NYSE: ETP) stock is up a modest 1.5% in the last month, and nearly 15% in the last year. Shareholders also receive a quarterly dividend of $0.92 from ETP, good for a 6.8% yield. Energy Transfer Partners owns one of the four LNG export facilities that had received government approval through 2013. ETP's facility is located in Lake Charles, La.
Teekay Tankers Ltd. (NYSE: TNK) stock has gained 3.8% in the month of February and is up nearly 31% in the last three months. As its name suggests, TNK is a transporter and has 29 tankers in its fleet that are used solely for LNG. Overall, the company owns 67 tankers. TNK is a great example of an LNG penny stock, as it currently trades just above $3.50 per share and has a market cap of $295 million. Quarterly dividend payments of $0.03 per share may not seem impressive at first glance, but that's a yield of 3.4% for shareholders.
Due to recent developments in the Panama Canal and in the LNG industry in general, TNK is a stock that Money Morning is bullish on in 2014.
CNOOC Ltd. (NYSE: CEO) shareholders are treated to a quarterly dividend payment of $3.22. That 4.6% yield is in addition to the 3.7% gain CEO stock has posted in the month of February. CNOOC is an investment holding company, and its subsidiaries are primarily involved with offshore crude oil and natural gas production. On the LNG front, CNOOC owns four LNG terminals in China. There are only six total LNG terminals operating in China currently.
ConocoPhillips (NYSE: COP) is a global name in the energy industry, but it also owns a 50% stake in the Freeport LNG project based in Louisiana. The project is expected to achieve commercial operation by 2018. In the last year, COP stock has climbed 12.7%. Long-term investors have seen the stock grow nearly 65% in the last five years. Not to be undersold is COP's 4.2% dividend yield. Shareholders receive a dividend payment of $0.69 every quarter.
Dominion Resources Inc. (NYSE: D) has received government approval on a $3.5 billion construction project that will transition its Cove Point, Md., LNG import facility into an export facility. The project is scheduled for completion by 2017. D stock is up nearly 11% in 2014 and more than 28% in the last 12 months. Additionally, Dominion pays a dividend yield of nearly 3.4%. That's a quarterly payment of $0.60 per share.
Sempra Energy (NYSE: SRE) stock is up 23% in the last year and 4% year to date. Shareholders are also given a quarterly dividend payment of $0.63, or 2.7%. Like Dominion, Sempra is in the process of transitioning its LNG import facility into an export facility. Unlike Dominion, Sempra is yet to receive government approval. SRE's facility is located in Hackberry, La.
Which stock do you think is the best play in the growing LNG market? Tell us on Twitter @moneymorning using #LNG.
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