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Supplement Your Social Security with This

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Oil and gas dividend dynamo LinnCo makes a great supplement to Social Security.

Publicada em: Economia e finanças
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Supplement Your Social Security with This

  1. 1. Supplement Your Social Security with This Source: LINN Energy
  2. 2. Social Security has a tough climb ahead of it. According to the 2013 Social Security trustees report, its key trust fund will be exhausted in 2035. However, tax income will enable it to keep paying about 72% of scheduled benefits through 2087.
  3. 3. Those dreary projections are why I’m taking matters into my own hands and investing now to supplement my Social Security. One stock I’m counting on to be there when Social Security is not is LinnCo.
  4. 4. Why LinnCo makes the perfect supplement • Currently, LinnCo’s dividend yield is 9.71%. • It’s paid monthly as opposed to quarterly, which is great for balancing monthly cash flow with expenditures. • Finally, because LinnCo’s tax structure is a C-Corp, the dividend has less paperwork than high yielding MLPs like its parent company LINN Energy. LinnCo already pays a generous dividend.
  5. 5. Why LinnCo makes the perfect supplement • LinnCo’s parent company, LINN Energy, has hundreds of low-risk drilling opportunities spread across its portfolio. • These opportunities should enable LINN Energy to grow its production in the low single digits. While LinnCo’s dividend is pretty compelling today, it should grow much higher in the future.
  6. 6. Why LinnCo makes the perfect supplement • LINN Energy has led its peer group in acquisitions as it has the capacity to acquire large asset packages from growth focused exploration and production companies. • In addition to that, it can use LinnCo to acquire entire companies as it did last year when it acquired Berry Petroleum. Further, LINN Energy’s main growth driver is its ability to acquire mature oil and gas assets.
  7. 7. Why LinnCo makes the perfect supplement As this slide notes, the combination of LINN Energy and LinnCo led the way in acquiring assets. Source: LINN Energy Investor Presentation
  8. 8. Why LinnCo makes the perfect supplement • Exploration and production companies continue to shed mature assets to fund shale fueled growth. • LINN Energy has tremendous access to the capital market because of its size and its ability to use LinnCo as an acquisition vehicle. Because of the shale boom there’s no end in sight to the opportunity to continue to grow by acquisition.
  9. 9. Why LinnCo makes the perfect supplement • A recent deal with Devon Energy added 3,800 currently producing wells along with 1,000 future drilling locations and 600 recompletion opportunities. • Before that a trade with ExxonMobil added 2,300 producing wells along with 400 future drilling locations. Not only do these deals bring an immediate boost to production, but most come with drilling upside.
  10. 10. Why LinnCo makes the perfect supplement • In the future, production could get a boost from enhanced oil recovery techniques including carbon dioxide flooding. • LINN Energy is currently working on an enhanced oil recovery project in the Rockies. Further, LINN Energy is still engaged in primary production across much of its portfolio.
  11. 11. Why LinnCo makes the perfect supplement • For example, last year’s East Goldsmith Field acquisition has upside to waterflooding the Clearfork formation as well as carbon dioxide flood potential in the Glorieta, San Andres and Holt intervals. However, the technique could be used elsewhere to extend production longer into the future.
  12. 12. Why LinnCo makes the perfect supplement The slide below shows LINN Energy’s opportunities from this one acquisition. Source: LINN Energy Investor Presentation
  13. 13. Why LinnCo makes the perfect supplement Needless to say, I see no end to the dividends coming from LinnCo. Because of that I’m more confident that it will still be around to supplement my Social Security even when that well has long run dry. Source: LINN Energy
  14. 14. Our FREE report on how you can get even more income during retirement.