Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

BP Prudhoe Bay Royalty Trust (BPT): Should You Trust the Highest-Dividend-Paying Stocks in Energy?

Key takeaways for investors
It seems like there is always a catch when it comes to investing, and when it comes to the highest-dividend-paying stocks in energy there is not one, there are two. First, the distributions paid by these trusts can be as volatile as the commodities that are produced, meaning that the payouts can shift significantly from quarter to quarter. Further, unlike a dividend-paying stock or a master limited partnership, there is an expiration date for the income as the underlying oil and gas wells will run dry. While those expiration dates are decades in the future, it is something to keep in mind if you are planning on trusting one of these companies to see you through your golden years. While these trusts might make a good addition to your portfolio, if you are looking for steady retirement income, then you are better off looking elsewhere.

The article Should You Trust the Highest-Dividend-Paying Stocks in Energy? originally appeared on Fool.com.

Fool contributor Matt DiLallo owns shares of SandRidge Energy. Matt DiLallo has the following options: Short Sep 2013 $5 Puts on SandRidge Energy. The Motley Fool owns shares of SANDRIDGE MISSISSIPPIAN TR II COM.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.