Getting Paid To Do Nothing

12/18/2013

“The quickest way to double your money is to fold it in half and put it in your back pocket.”
-- Will Rogers, American Humorist.

I like to own stocks that pay me while I’m doing nothing. It's even nicer if I'm getting paid while I'm taking a nap. I like waking up and logging into my brokerage account each morning and finding money there that I didn’t deposit. I like being surprised that I have more money today than yesterday and that I’ll have even more money tomorrow. All this is due to the miracle of dividends. In fact this is the main reason why I like stocks in the first place.

So I’m always looking for companies that pay dividends. Lots of dividends. Increasing dividends. I'm hoping that the money I spend on stocks is similar to the idea of sunk costs. It’s money that’s been spent and is now converted into stock certificates of companies that will pay me a dividend. In fact I’d love to buy all my stocks like that and never sell them. That would mean that they would be companies that continually increase revenue, earnings and dividends forever. And the more they increase their dividends the better. If a company actually did that I wouldn’t ever need to sell it. And I’d be happy. Forever.

And that’s why I spend my nights and weekends researching publicly traded companies.

BreitBurn Energy Partners (BBEP) is an independent oil and gas master limited partnership focused on the acquisition, exploitation and development of oil and gas properties for the purpose of generating cash flow to making distributions in the form of dividends to its unitholders. Their assets consist primarily of producing and non-producing crude oil and natural gas reserves located in the Los Angeles Basin in California, the Wind River and Big Horn Basins in central Wyoming, the Powder River Basin in eastern Wyoming, the Evanston and Green River Basins in southwestern Wyoming, the Sunniland Trend in Florida, the Permian Basin in Texas, the Antrim Shale in Michigan, and the New Albany Shale in Indiana and Kentucky. (See below for a downloadable pdf containing a Fact Sheet and Key Investment Highlights).

Oil and Gas Exploration and Production Locations

BreitBurn Energy Partners appears to be one of these companies I'm always looking for and they recently changed their dividend policy to a monthly distribution. The company had been paying quarterly dividends and astonishingly their dividends have increased each quarter from the previous quarter for the last few years. On November 6th when they announced their third quarter results they also announced that they were switching to a monthly distribution of dividends. (See below for a downloadable pdf containing Third Quarter Earnings and Dividend Announcement). That switch got my attention. BreitBurn Energy Partners knows their unit holders and those unit holders like monthly dividends a lot. Hopefully this switch will attract a larger audience for their shares which will in turn put upward pressure on their stock. Other upstream oil and gas exploration and production companies are noticing this and I expect this competition to move in this same direction.

I am now starting to accumulate a position in this company’s stock and I am also researching and evaluating the other companies in this industry.