Dividend Stocks That Are Crushing the Market

• By the tickerspy.com Staff
• On 10:24 am EDT, Wednesday October 21, 2009

Earning big dividends doesn't have to mean limiting equity gains.

Throughout the recession a number of normally stable dividend stocks made uncharacteristically large swings. Now that the economy is stabilizing, some of the same sectors are moving higher, and prudent investors are getting paid to watch their equity grow.

Amid signs of economic stability and a falling U.S. dollar, a number of oil-tied equity sectors have won big over the last month. As short term plays, three segments of the industry earned investors double-digit average returns.

Over the last month, the Canadian Energy Trusts Index has shot up by 14%, while paying an average dividend of 6.4%. By comparison, other top-performing oil sectors paid average yields of less than 3%.

From an equity standpoint, Enterra Energy Trust (NYSE: ENT - News), Penn West Energy Trust (NYSE: PWE - News), and Baytex Energy Trust (NYSE: BTE - News) have outperformed recently. All three are ahead by more than 15% on a one-month basis. While the former has suspended its dividend payments, Penn West and Baytex are paying out 10% and 5% dividends respectively.

Meanwhile, select components of the Oil and Gas Pipeline Stocks Index have also soared. Cheniere Energy Partners (AMEX: CQP - News) and Duncan Energy Partners (NYSE: DEP - News) have both shot up by more than 25% in the last month, while paying dividends of 8% or more.

Energy Transfer Partners (NYSE: ETP - News) and Kinder Morgan Energy Partners (NYSE: KMP - News) also pay over 7% dividends, although their equity gains have been less impressive recently.

Commodity-tied master limited partnerships (MLPs) are another high-flying sector to earn big dividends. Components of the MLPs Index pay an average 7.7% dividend. Credit Suisse initiated the U.S. MLP sector with an Overweight rating this morning, according to Reuters.

Enterprise Products Partners (NYSE: EPD - News) and Plains All American Pipeline (NYSE: PAA - News) were both popular picks among Pros at the start of the third quarter.

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