Linn Energy (Nasdaq: LINE): Lock In A 10% Yield With This Rare Monthly Dividend Payer

In my database, I count more than 700 securities that dish out monthly distributions. The overwhelming majority of those are ETFs and closed-end funds. The pool of common stocks is much shallower. But there are a few dozen to choose from, including a couple names you might already be familiar with, such as current High-Yield Investing portfolio holdings Realty Income (NYSE: O) and Prospect Capital (Nasdaq: PSEC).
Another one you might want to consider is Linn Energy (Nasdaq: LINE), a rare upstream master limited partnership (MLP). Much like one of my current holdings, Linn acquires mature oil and gas-bearing properties and then uses hedge contracts to stabilize pricing and immunize cash flows against commodity price volatility.
The company was attacked last year by a dubious short selling firm that questioned the Linn's accounting practices (among other complaints, alleging improperly calculated distributable cash flows). The bearish arguments spooked investors, almost cutting the stock price in half.
But a subsequent investigation by the SEC revealed no wrongdoing, and the shares have since stabilized. But they still don't adequately reflect the earnings potential of the firm's assets, particularly after the accretive $4.6 billion acquisition of Berry Petroleum in December 2013.
With 22,000 producing wells from Texas to North Dakota, Linn's oil and gas output now exceeds 1 billion cubic feet equivalent per day. And these long-lived properties hold 7 trillion cubic feet of reserves, which will provide a steady, predictable cash flow stream well into the future.
The shares have historically offered a robust 8.2% dividend yield over the past four years. But the recent dip has allowed investors a chance to lock in a 10% yield -- almost double the MLP average. And it comes in the form of 12 monthly payments of $0.242 per year, for an annual dividend of $2.90.
I don't have the space for a complete analysis today, but LINN will definitely be on my radar and should be on yours as well.
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