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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 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.

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