Markets pulled back sharply yesterday on news of the Fitch debt downgrade (though in my book, it’s likely to do more with it being a natural pullback as the market digests the strong upward moves of the last few months).
Plus, August has historically been a choppy month for the markets – so don’t be surprised if you don’t see it going straight up like it has the past few months.
With that being said, let’s look at how you can ignore all this market volatility and just focus on having stocks that pay you healthy passive income.
Today’s stock pick has one of the most stable prices I’ve seen in a long time – essentially flat for the year and the past five years.
Not a stock you want to be buying for capital appreciation…
But with a dividend yield that’s currently touching 14% (yes, 14%) – while still maintaining a payout ratio of about 40%…
This is one stock you might want to help you get through this choppy month.
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Alliance Resource Partners, L.P. (ARLP)
Alliance Resource Partners is a natural resource company focused on probably the most-maligned energy source in the Western world – coal (although it does have O&G operations as well).
That’s right, Alliance Resource Partners is a coal producer, so investors who prioritize ESG should stay away from this one.
Yet, perhaps the reason why this stock has such a high dividend yield is precisely because it doesn’t fit in with the modern environmental theme. If a significant portion of investors are avoiding this stock for reasons that have nothing to do with its actual financial fundamentals – that creates an opportunity.
As for the company itself, it understands that its investors prioritize stability – and management delivers on that front. It locks in price and volume commitments years in advance.
ARLP just released its second-quarter earnings a couple days ago, with management confidently stating they expect 2023 to be another record year for the company. With strong financial fundamentals and a highly attractive dividend yield of 13.8% – now may be the time to start collecting dividend income from this stock.
To your wealth,
Felix @ Ace of Investing