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My Top Natural Gas Pick

Buy Spectra Energy for appreciation and dividend growth


Spectra Energy (SE) — This integrated natural gas holding company is a 2007 spin-off from Duke Energy (DUK) and has been steadily growing sales and assets ever since. Along with its subsidiaries, Spectra currently transports about 12% of all natural gas in the U.S. and holds 7% of the nation’s storage capacity.

It has consistently increased its dividend, up 28% in the past five years. It now stands at $1.34 per share for a current yield of 3.6%. S&P expects dividends to increase to $1.37 in 2014.

On Feb. 4, the company reported Q4 earnings of $0.41 per share versus a consensus estimate of $0.38, and revenues beat estimates as well.

Just prior to the earnings report, the stock broke from an eight-month consolidation, which followed a breakaway gap in June. Accumulation has been above normal and MACD is in bullish territory.

Buy SE for long-term participation in the growing natural gas industry and a trade to the mid-$40s.

SE Chart
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