Generally stock prices of companies in this industry grow very slowly, if at all, because their payout ratios are unusually high at around 90% leaving little if any retained earnings to grow the company in the future. They do, however, tend to distribute dividends at a rate that is 5-6 times higher than normal securities (9-11%). As a result these are great securities for investors seeking current income or as great vehicles for generating income for investing in other securities that do grow dividends over time. It is for this latter reason that I generally use these companies' dividends.
For additional articles related to this topic, please see below.
LRR Energy, L.P. (LRE), through its subsidiary, LRE Operating, LLC, operates, acquires, exploits, and develops producing oil and natural gas properties in North America. It holds interests in various properties located in the Permian Basin region in west Texas and southeast New Mexico; the Mid-Continent region in Oklahoma and east Texas; and the Gulf Coast region in Texas. As of December 31, 2013, the company had total estimated proved reserves of approximately 30.1 million barrels of oil equivalent. LRE GP, LLC serves as the general partner of the company. The company was founded in 2011 and is based in Houston, Texas. (Daily Chart) (Weekly Chart)
New Source Energy Partners L.P. (NSLP) is engaged in the acquisition and development of oil and natural gas properties in the United States. As of December 31, 2013, the company had 124,759 gross acres in the Golden Lane field in east-central Oklahoma; and 161 gross proved undeveloped drilling locations. Its estimated proved reserves on its properties consisted of 20.6 MMBoe. New Source Energy GP, LLC operates as a general partner of the company. The company was founded in 2012 and is headquartered in Oklahoma City, Oklahoma. New Source Energy Partners L.P. operates as a subsidiary of New Source Energy Corporation. (Daily Chart) (Weekly Chart)
Additional Related Articles of Interest
Chevron - When High is Too High
The Changing Oil Industry
Eight Percent Solution
Chevron and ExxonMobil
Dividend Growth or Dividend Income
Upstream E&P MLPs I'm buying
Exploration and Production MLPs
Upstream Oil and Gas MLPs
Master Limited Partnerships