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Freeport-McMoRan, Dow Chemical and PotashCorp all pay a compelling dividend and have visible growth prospects. That makes each a great stock idea for an IRA.
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3 Great Income Stock Ideas for Your IRA
Photo credit: Flickr/TaxCredits.net
There are two important characteristics to finding great income stocks for
your IRA.
First, start with a company that already
offers a compelling dividend today. Photo credit: Flickr/TaxCredits.net
Personally, I like to start with a dividend yield
that’s over 3%. It suggests the company is
serious about its dividend.
Photo credit: Flickr/peddhapati
Second, I want to see visible growth prospects that will see that dividend grow for years
to come. Photo credit: Flickr/Aaron Patterson
I’m looking for growth capital spending plans currently
underway to capture a market that has long-term potential
beyond current plans.Photo credit: Flickr/www.stockmonkeys.com
These three companies really stand out as great income stocks to own in an IRA.
Freeport-McMoRan Copper & Gold
Background:
Founded in 1912 in Freeport Texas near a new sulfur mine.
It is now the world’s largest publicly traded copper producer.
Additional resource diversification into gold, silver, molybdenum, cobalt, oil and natural gas.
Photo credit: Flickr/benketaro
Freeport-McMoRan Copper & Gold
Background:
Founded in 1912 in Freeport, Texas near a new sulfur mine.
It is now the world’s largest publicly traded copper producer.
Additional resource diversification into gold, silver, molybdenum, cobalt, oil and natural gas.
Freeport-McMoRan Copper & Gold
Dividend History:
Freeport-McMoRan has a long history of paying a regular cash dividend as well as an occasional special supplemental dividend.
Current dividend yield is 3.5%. While its dividend rate has been stagnate for
more than two years, it should grow over time.
Freeport-McMoRan Copper & Gold
Visible organic growth:
Freeport-McMoRan expects to grow its annual copper production by more than 5 billion pounds.
That’s a 37% increase from 2012 to 2015. Gulf of Mexico oil and gas production is expected
to more than double over the next five years.
Freeport-McMoRan Copper & Gold
Visible organic growth:
Freeport-McMoRan expects to grow its annual copper production by more than 5 billion pounds.
That’s a 37% increase from 2012 to 2015. Gulf of Mexico production expected to more
than double over the next five years.
Source: Freeport-McMoRan Inventor Presentation
Freeport-McMoRan Copper & Gold
Long-term growth trends:
China’s fundamental demand for copper remains strong.
Production from existing copper mines will create a shortfall that will need to be made up by expansions and new projects.
Oil and gas demand growth expected to remain robust due to emerging markets.
Dow Chemical
Photo credit: Dow Chemaical
Dow Chemical
Background:
Dow was incorporated in 1897 to manufacture and sell bleach.
Today Dow operates in six segments: Electronic and Functional Materials, Coatings and Infrastructure Solutions, Agricultural Sciences, Performance Materials, Performance Plastics and Feedstocks and Energy.
Dow Chemical
Dividend History:
Dow has a long history of paying a regular cash dividend.
Current dividend yield is 2.84%. While its dividend yield is lower, it’s still a
respectable rate that should grow over time.
Dow Chemical
Visible organic growth:
Dow is on path to grow its EBITDA to more than $10 billion per year thanks to near-term controllable growth catalysts.
Gulf Coast petrochemical investments will take advantage of cheaper American natural gas as a feedstock.
Dow Chemical
Visible organic growth:
Dow is on path to grow its EBITDA to more than $10 billion per year thanks to near-term controllable growth catalysts.
Gulf Coast petrochemical investments will take advantage of America’s nature gas advantage.
Source: Dow Chemical Inventor Presentation
Dow Chemical
Long-term growth trends:
Global food demand will increase by 70% from 2000 to 2050, which is a massive market for Dow AgroScience.
North American energy boom is providing cheap feedstocks for Dow’s petrochemical business.
PotashCorp
Photo credit: Flickr/Just a Prairie Boy
PotashCorp
Background:
Potash Corporation of Saskatchewan, an entity owned by the Government of Saskatchewan, went public in 1989.
Today PotashCorp is the world’s largest fertilizer company by capacity.
It produces potash, nitrogen and phosphate.
PotashCorp
Dividend History:
PotashCorp has been paying regular dividends since 1990.
However, its dividend has really surged over the past four years as it’s up 950%.
Current dividend yield is 3.69%.
PotashCorp
Visible organic growth:
PotashCorp is 93% complete with its CDN $8.3 billion potash expansion program.
Expansion has PotashCorp well positioned to supply near-term market growth with the flexibility to significantly grow future sales volumes.
PotashCorp
Visible organic growth:
PotashCorp is 93% complete with its CDN $8.3 billion potash expansion program.
Expansion has PotashCopr well positioned to supply near-term market growth with the flexibility to significantly grow future sales volumes.
Source: PotashCorp Inventor Presentation
PotashCorp
Long-term growth trends:
Less arable land, population growth and an expanding middle class will necessitate increased food production.
Overall, global food demand will increase by 70% from 2000 to 2050, which is a massive market for fertilizer producers.
Investor takeawayDow, Freeport-McMoRan and PotashCorp all have a compelling current dividend, visible near-term growth prospects and clear
long-term catalysts. That makes each a great income stock for an IRA.
Photo credit: Flickr/TaxCredits.net
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