If you stare at a picture of Janet Yellen long enough you’ll see her eyes move.
What are those almond shaped oculars looking at? Don’t be fooled my hard-asset friend, she’s taking a long hard look at your savings!
With a firm grip on the monetary-policy levers, our new Fed Chairman knows well that you can’t create prosperity out of thin air. However, creating prosperity for some at the expense of others? Well that shouldn’t be too hard now, should it?
I’ve got to admit I don’t know much about Mrs. Yellen. Does she have a dog? Make a killer casserole? Enjoy cross country skiing? Beats me!
Companies that build…natural gas infrastructure in the Bakken…could quite literally pay dividends for decades.
Heck, I don’t even know where she lives. Maybe Taper City, U.S.A.?
Regardless of these nuisances, there’s one thing I do know: she’s got one helluva act to follow.
For years Ben Bernanke wreaked havoc on the savings accounts of many an American. Helicopter Ben forced average, hard-working, big-saving Americans to head out of their comfort zone. (If I have to look up another bond fund for my father, I’ll scream!)
Can’t earn a retirement saving your money in a bank account these days, that’s for sure. And if you want to make 1, 2, dare I say 3% you’ve got to juggle so many CDs and money market accounts you’d make your head spin.
Had a sane person followed the act of Ben Bernanke, you’d have seen a quick, sincere apology and a move towards getting bank accounts back to the way they should be. You know… if you have money it should hold some value….and at that rate people will pay you interest to hold it and lend it out. Ah the good old days!
But here we are a few days since Yellen’s confirmation as chairman and we’ve yet to hear a peep. Interest rates aren’t headed anywhere. And cash in a bank is about as warm as a polar vortex.
So much for all that Taper City U.S.A. excitement. Looks like the easy money will continue to flow.
Whelp, onward we march. It’s time to hunt for more ways to sidestep the Fed’s greedy little hands. If we can’t hide our money in a bank account – we’ll have to make our money pay dividends another way (or two…)
Where your bank account may not have the interest-rate gusto to suffice, there are a handful of long-term, safe, energy plays that could foot the bill.
As we covered in yesterday’s “rumor” article, producers in North Dakota’s Bakken are increasing production at breakneck speed.
Certainly there’s a way to cash in by hitching a ride on the best and most efficient producers (the ones we’ve covered in these pages include yesterday’s highlight, EOG Resources, as well as Oasis Petroleum.)
But there aren’t just wildcatting opportunities in the Bakken. In fact, there are two specific ways to collect long-term dividends from this massive shale play that I’ll share with you now…
First up, though, a bit of pertinent Bakken news. A week ago U.S. regulators warned that Bakken crude oil may be more flammable than other varieties of crude.
According to the Oil and Gas Journal, “US officials are investigating whether Bakken crude oil produced in North Dakota could have a higher flammability than other crude oils, and could be more prone to explosions. The investigation follows a recent rail transport accident in North Dakota, along with several other rail-related accidents.”
I’m no chemist so I’m not certain if the crude is noticeably more flammable. I’d venture a guess that any train derailment with petroleum products would lead to a disaster situation. That said, let it be clear I’m still bullish on America’s rail revival – I don’t think this news will hurt the rail industry.
And while this won’t likely have an impact on crude-by-rail shipments, I know for certain it won’t have an impact on the two Bakken dividend plays below.
With more oil and gas flowing from the prairielands of North Dakota there’s still growing demand for gathering and pipeline capacity. More and more that pipeline demand is coming for natural gas and natural gas liquids (NGLs.) Companies that build and maintain natural gas infrastructure in the Bakken and other U.S. shale plays could quite literally pay dividends for decades.
Said another way: a nice set of pipes could pay off handsomely!
The pipeline map above belongs to Oneok Partners LP (OKS.) This limited partnership company owns gathering, processing, storage and transportation assets for natural gas and natural gas liquids. As you’ll see from their pipeline map they’ve got plenty of exposure to the booming Bakken, Permian and Eagle Ford. The stock trades around $50 a share and for our purposes today, pays a solid 5.6% dividend.
If the name sounds familiar that’s because it’s affiliated to Oneok Inc. (OKE) a company that we’ve referenced in these pages before – with regard to Oklahoma’s blossoming shale plays.
Add it all up and both companies – Oneok Partners (OKS) and Oneok Inc. (OKE) – could add some dividend and share price appreciation to your bottom line.
Of note, Oneok Inc. is in the process of spinning off another lucrative natural gas business called ONE Gas. The deal is slated to go through this quarter, and when it happens Oneok Inc. is expecting to pay an even higher dividend (currently sitting over 2%.)
As I said above that these energy assets could pay dividends for decades. Well, the way the easy money is flowing at the Fed, it may be decades before we see some decent interest on our savings accounts.
Now’s your chance to sidestep the Fed’s easy money policy — and add some powerful dividend income to your portfolio.
Keep your boots muddy,
for The Daily Reckoning
Ed. Note: There are plenty of profit opportunities in the Bakken, and Matt has made it his mission to show his Daily Resource Hunter readers the best of the best. Don’t miss another great opportunity. Sign up for the FREE Daily Resource Hunter, right here.
Original article posted on Daily Resource Hunter
Looking ahead, the Fed will likely scale back on its low-interest bond subsidy. The training wheels are coming off.
Matt Insley is the managing editor of The Daily Resource Hunter and now the co-editor of Real Wealth Trader and Outstanding Investments. Matt is the Agora Financial in-house specialist on commodities and natural resources. He holds a degree from the University of Maryland with a double major in Business and Environmental Economics. Although always familiar with the financial markets, his main area of expertise stems from his background in the Agricultural and Natural Resources (AGNR) department. Over the past years he's stayed well ahead of the curve with forward thinking ideas in both resource stocks and hard commodities. Insley's commentary has been featured by MarketWatch.
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