Drill Deep With These 5 Dividend Stocks

For investors looking for dividend stocks in the energy sector, deepwater drillers can't be ignored. Here are five of the best.

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Drill Deep With These 5 Dividend Stocks

Dividend Stocks To Buy #2 — SeaDrill (SDRL)

sdrl 150x150 Drill Deep With These 5 Dividend StocksSDRL Dividend Yield: 8%

Controlled by the “Warren Buffett” of shipping — billionaire John Fredriksen — SeaDrill (SDRL) is the deepwater firm to beat when it comes to dividend stocks. Currently, SDRL stock carries a mammoth 8% dividend yield.

Like ESV, SeaDrill has a super-modern and ultra-deepwater fleet. That fleet has proved to be both a blessing and curse. Given its smaller and specialized fleet, SDRL’s latest guidance numbers showed a potential near-term slowdown in E&P capex spending.

Basically, energy firms are stepping off the accelerator when it comes to drilling this year. That slowdown has caused SDRL stock to plunge by 7.8% during its latest earnings announcement.

However, investors looking for dividend stocks could use the weakness to snag up shares of SDRL stock and its 8% dividend yield.

The key to SDRL has been its relationship with its master limited partnership subsidiary SeaDrill Partners (SDLP). SeaDrill has been quite successful at “dropping down” assets into SDLP to avoid taxes and gain hefty distributions. All of which continues to boost cash flows and dividend yields for SDRL stock.


Article printed from InvestorPlace Media, http://investorplace.com/2014/03/dividend-stocks-sdrl-rig-pacd-esv-ne/.

©2014 InvestorPlace Media, LLC

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