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Zacks Investment Ideas feature highlights: Brookfield Infrastructure Partners, Lorillard, Genesis Energy and Omega Healthcare Investors

October 08, 2012 | Comments : 0 Recommended this article: (0)

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For Immediate Release

Chicago, IL –October 8, 2012 – Today, Zacks Investment Ideas feature highlights Features: Brookfield Infrastructure Partners ( ( BIP - Snapshot Report ) ), Lorillard Co ( ( LO - Analyst Report ) ), Genesis Energy, L.P. ( ( GEL - Snapshot Report ) ) and Omega Healthcare Investors ( ( OHI - Snapshot Report ) ).

4 Stocks Yielding More Than 4%

When most people think of generating returns from the stock market, they think of only one thing: capital appreciation.

This is somewhat understandable given that the average yield on the S&P has fallen considerably over the last few decades. It currently yields just 1.9%, well below its historical average of 4.5%.

But historically, dividends have accounted for more than 40% of the total return of the S&P 500, and most of the best performing stocks over the long haul have been stodgy dividend payers.

Growth & Income

Of course, it shouldn't be all about the dividend. There are plenty of stocks out there that offer alluring yields but have virtually no growth prospects. Those quarterly dividend checks will provide little comfort if the company's stock price is heading off a cliff.

That's why it is wise for investors to consider both growth and income. While stock prices can swing wildly over the short-term, stock prices tend to follow earnings over the long haul.

Long-term Focus

For investors willing to ride out the short-term volatility and take a long-term approach, stocks look relatively attractive compared with bonds. The yield on the 10-year Treasury note is hovering around 1.6%, well below its 50-year average of 6.7%, and less than the average yield of the S&P 500.

And dividend-paying companies with strong cash flows and rising earnings typically raise their payouts, unlike a bond which usually comes with a fixed coupon payment.

I've compiled a list of 4 stocks with both growth and income characteristics. These companies have a yield greater than 4%, a history of raising their dividends and are expected to grow earnings in both 2012 and 2013.

Here they are:

Brookfield Infrastructure Partners ( ( BIP - Snapshot Report ) )

Brookfield Infrastructure Partners is comprised of long-life assets that provide essential products and services for the global economy. It primarily operates in 3 segments:

Utilities: (57% of total funds from operation)
Transport & Energy: (39%)
Timber: (4%)

Brookfield pays a dividend that currently yields a solid 4.3%. And it has steadily risen it since going public in 2008.

Lorillard Co ( ( LO - Analyst Report ) )

Lorillard is the third largest cigarette maker in the United States. It is also older than the United States, having been founded in 1760. It sells cigarettes under six brands, its most popular being Newport.

Like it or not, Lorillard generates strong, stable cash flows. And this has lead to steady dividend increases. It currently yields 5.3%.

Genesis Energy, L.P. ( ( GEL - Snapshot Report ) )

Genesis Energy is a master limited partnership ("MLP") focused on the midstream segment of the oil and gas industry in the Gulf Coast region of the U.S. Because it generates steady fee-based income, its results do not fluctuate heavily with volatile oil and gas prices.

It currently pays a distribution that yields a juicy 5.4%. After cutting its distribution early last decade, the partnership has been consistently raising it over the last several years.

Omega Healthcare Investors ( ( OHI - Snapshot Report ) )

Omega Healthcare is a Real Estate Investment Trust ("REIT") that invests in long-term care facilities, primarily nursing homes. It generates revenue from long-term leases and mortgage agreements on these facilities.

From 2007-2011, core operating revenue and funds from operation (FFO) increased every year at a compound annual growth rate of 16% and 17%, respectively. It currently pays a dividend that yields a juicy 7.3%. That's more than 4x what you'd get on a 10-year Treasury note. And since 2004, its dividend has grown at a compound annual rate of 11%.

The Bottom Line

Income investors looking for yield should consider looking to the stock market these days. Likewise, growth investors looking for total return should consider dividends along with capital appreciation, as dividends historically have made up a large chunk of overall returns.

These 4 stocks offer both growth and income and should provide strong total returns over the long haul.

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