Wednesday, January 12, 2011

RSY XXV: Less (e)Gas and more Lumps of Coal in the Stockings.

Gas Natural Inc. (EGAS) has been downgraded to hold by Sabrient Systems and today was its latest monthly ex-dividend date. As such, let us take a little bit of profits from our position at the opening bell tomorrow. There looks to be some upward constraint above the $10.60 mark and thus RSY recommends to sell 200 shares of EGAS (half of the 400 position) at a limit price of $10.59 {GTC}. We should also note that NGPC provided us a dividend of $36.00 from our 200 shares on the 7th of this month.

If you didn't get a lump of coal in your stockings, then maybe buying some coal is a good idea now. Alliance Resource Partners, L.P (ARLP) supplies coal predominantly to utilities (91.8%) and the rest for industrial users in the US. The Motley Fool noted that they Always Raise Their Dividend. I find it more important that regular dividends are paid consistently than insistence on having the dividends increase every time but it certainly is a positive aspect of this stock. ARLP's accounting practices are quite good with a high forensic accounting score. Kapitall noted that ARLP is a company with Conservative Accounting Practices.

On the macro side of the equation, coal does not seem to have as many problems as it did a few years ago. One reason that I shorted RAIL back then. With unemployment high, the attention to pollution from coal has taken a back seat. The BP oil blowout did not help oil drilling and production here, and thus conversely electricity companies will continue to rely on coal for the foreseeable future. The Macro View of the economy has picked up and thus energy consumption will be part of this increased demand including commodities. Paul Whitfield thinks that ARLP is too thinly traded, but overall rates it and its partner Alliance Holdings (AHGP) as excellent choices.

This stock has options available for it. RSY recommends a buy of 100 shares of ARLP at a limit price of $70.39 {GTC}. The recommended moves today reduces the share of natural gas utilities and increases exposure in the production of energy...dirty coal industry.

Misc. Links:
Alliance Resource Partners: Coal and Dividends Are a Good Mix

Steelmakers expect prices to rise with Australian floodwaters

Australian Flood a Boon to US Producers?

Retiring Soon? Here Are 3 Stellar Dividend Picks

Six Consumer Stocks Paying Sustainable Dividends to Own in 2011 - Seeking Alpha

The Most Outstanding Dividend Portfolio I Know

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