Income Thoughts

“Bonds of Exxon Mobil and Johnson & Johnson are trading with yields below those of comparable Treasurys, a sign that investors perceive them as a safer bet. It is a rare phenomenon that some market observers said could be the beginning of a new era for debt markets. It could ultimately mean some companies will borrow at lower rates than the U.S. government.”  WSJ

“The junk bond, or high-yield bond, universe has seen yields decline steadily in both absolute and relative terms, creating a financing bonanza for companies whose credit rating is below investment grade and for the banks underwriting their debt issuance. But questions about corporate earnings may provoke questions about whether investors’ hunger for interest income has driven valuations too high, and yields too low.”  Alpha Now

For Holy Grail of Dividends, Why Coca-Cola and McDonald’s Demand Attention at Ycharts.

Has the dividend meme been played out?  Reformed Broker

US Treasury Bonds Look Vulnerable at All Star Charts.

Investing in Master Limited Partnerships:  Risks and Opportunities at Ritholtz.

“We also noted that around 80 percent of MLP type structures are involved in the energy and natural resource businesses, many of them in the midstream in between production and marketing.”  RBN Energy

The investor determined to invest for yield might consider Natural Resource Partners (NRP).  Yesterday the coal names were shellacked on the election results and NRP’s yield moved up to 10.40%.  Is it safe?  ISA believes so.  The depressed coal environment has cashflow and distributions near the edge.  Any return of the coal markets would bolster the business.  For some time management has moved to bolster the non-coal business and the fruit is to come in the future.

Before investing, enjoy NRP’s third quarter results and a recent presentation.

We all bet our own money and take our own chances.