Due to generally high CAPEX spending requirements, the energy sector usually isn’t a fruitful hunting ground for dividend stocks. Dividends — minus the super majors like Chevron (CVX) or ConocoPhillips (COP) — are usually on the paltry side. It just takes a lot of dough to produce energy these days.
In fact, the broad Energy Select Sector SPDR (XLE) only pays a measly 1.73% in dividends. That’s less than the S&P 500 and substantially less than treasury bonds.
However, those investors looking for good dividend stocks shouldn’t give up all hope of finding 3%-plus payouts in the energy patch. There are some niche players that offer some pretty high income potential. Many aren’t well known, but they could help guide your portfolio to higher returns in the New Year.
Here’s five of the “odd-ball” niche players that make solid dividend stocks.