Tuesday November 06, 2012
by Gordon Pape, editor Internet Wealth BuilderI believe yield plays will outperform in 2013. This is an on-going story and I don't expect it to change soon if for no other reason than demographics.
The baby boomers are coming up to retirement age and as that happens more people are going to be looking to supplement their income with investment cash flow. One of the easiest ways to do this is to invest in securities that offer regular payments.
Brookfield Infrastructure Limited Partnership (
BIP) is a spin-off from Brookfield Asset Management.
It's a limited partnership based in Bermuda that owns or has interests in a variety of infrastructure assets including railroads and a coal terminal in Australia, a gas pipeline in the Chicago area, port facilities in the U.K., and electrical transmission lines in Chile.
It has an excellent distribution record with regular increases including a 7% hike this year. Plus it offers tax advantages as a bonus. Last year, 64% of the distribution was considered return of capital. We rate it as moderate risk.
Bonavista Energy (
BNP) is a play on strengthening natural gas prices, which are up more than 70% since last spring's lows. The shares pay $0.12 a month ($1.44 a year) to yield 7.8%, which is not guaranteed, of course.
The high yield should be a tip-off that there is more risk here than in the Brookfield LP. Another slump in gas prices could result in a dividend cut so you take your chances with this one.
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