Exxon Mobil Corporation (XOM), Sunoco Logistics Partners L.P. (SXL): Three Stocks for a Safe Retirement Portfolio

Page 1 of 2

The stock market by its precise nature is volatile, with high rewards for some and serious risk for others. However, when building a retirement portfolio to build a steady yield over the years, many will try and fail to choose the correct stocks to follow for a secure future. No one can predict the future, but there are better ways to prepare than others. Certain safe income stocks allow for high yield and little risk.

Out of the following three dividend stocks, two belong in the energy sector and one to the consumer defensive sector. Energy stocks are Sunoco Logistics Partners L.P. (NYSE:SXL) and Exxon Mobil Corporation (NYSE:XOM), while General Mills, Inc. (NYSE:GIS) is from the consumer defensive sector. All three companies have an established history of paying increasing dividends with steady price appreciation.

Sunoco Logistics Dividend Profile

Sunoco Logistics Partners L.P.Sunoco Logistics Partners L.P. (NYSE:SXL) is engaged in the terminalling, transport, and storage of crude oil and refined products. The partnership has been increasing its distributions on a quarterly basis. Currently, the partnership provides a quarterly distribution of $0.5725 cents a share. In the past five years, it has been able to enlarge its quarterly distributions by 83.69%.

Is the dividend safe?

The partnership distributions are fully backed by its solid financial situation and a smart investment strategy. Its strategy for future growth involves increased asset utilization, continued pursuit of prospects occurring due to market dislocations, and expansion of its platform through asset acquisitions and organic expansions.

With this business plan, the partnership continues to generate solid financial results. Recently, the partnership announced its first quarter results with an adjusted EBITDA of $236 million – an increase of $67 million over the past quarter. At the end of the first quarter, the partnership generated a record distributable cash flow of $195 million.

Along with solid financial performance, it is aggressively working on future growth investment strategy. During the first quarter, it acquired the Marcus Hook facility from Sunoco Logistics Partners L.P. (NYSE:SXL) for $60 million. I believe this acquisition demonstrates its continued dedication to chasing opportunistic growth in natural gas liquids (NGLs).

ExxonMobil Dividend Profile

Exxon Mobil Corporation (NYSE:XOM) has a long history of dividend payments. Recently, Exxon Mobil Corporation (NYSE:XOM) declared a quarterly dividend of $0.63 cents per share. This is the company’s 31st consecutive dividend increase. The company has increased its dividends by 57.5% in the past five years.

Is the dividend safe?

Exxon Mobil Corporation (NYSE:XOM) is currently having short-term problems with production and reserves. There has been a 3.5% decrease in oil equivalent production, in the first quarter. The depressed economy has been blamed for the decline in production; however, strong margins have enabled Exxon Mobil Corporation (NYSE:XOM) to enlarge EPS by 6% relative to the last year.

Exxon’s cash flows also convey a positive impression of the company to dividend investors. Its operating and free cash flows were $50.5 billion and $16.6 billion respectively in the last 12 months. There has been a decline in free cash flow mainly due to high capital expenditure on investments in growth opportunities. In the past 12 months, its capital expenditures stand at $33.9 billion, the highest in the company’s history. Still, Exxon’s free cash flow adequately covers its dividends. I believe its dividends are safe as long as its free cash flows provide coverage to dividends.

General Mills Dividend Profile

General Mills, Inc. (NYSE:GIS) is one of the top companies known for consistently increasing dividends. It has sustained its dividends for more than a century. Presently, General Mills offers a quarterly dividend of $0.38 per share with a steady price appreciation.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!