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High-Dividend Stock Yields 10%, Bucked Brexit Pullback, Has Big Cash Flow And Revenue Growth


This stock was steady during the recent Brexit pullback and has a built-in upside future gain.

It has distribution coverage of over 14x and had record distributable cash flow in Q1 2016.

It had 20% revenue growth, 25% EBITDA growth, and 26% DCF growth in Q1 2016.

Did the recent Brexit pullback and volatility give you the willies? Many dividend stocks, particularly financials, fell by double digits between 6/24/16 and 6/27/16 in the most volatile sessions since early February.

But a few high dividend stocks that we've covered in recent articles barely budged. Notably, most of our favorite preferred stocks held firm. This makes more sense now than ever. Why? Because there's now very little chance of the Fed raising rates in 2016 and preferreds can experience downward pressure when there are strong rate hike fears as they did in December 2014.

In fact, "traders are now pricing in a greater probability that policy makers will cut rates in upcoming meetings than raise them. They don't assign more than a 50% chance of an increase until the beginning of 2018." (Source:

We've written about Dynagas LNG Partners LP's (NYSE:DLNG) common units and its Preferred A shares (DLNG-A) previously. We own both the common and the preferred, but we feel that the preferred shares offer income investors a unique opportunity to:

1. Own a more stable dividend stock, which isn't nearly as volatile in market pullbacks or on down-days.

2. Lock in a future upside gain of over 8%, due to being priced significantly below their liquidation/call value.

3. Earn a 9.9% dividend yield on an income stream that is covered by over 14 times.

Take a look at how tight of a range these preferred shares have traded over the past month. This is not extraordinary for preferred shares, but what was reassuring to us was how resilient they were on 6/24/16 and 6/27/16.

On 6/23/16, DLNG-A opened at $22.56 and closed at $22.82, then opened at $22.66 on 6/24, before closing up at $22.70. On 6/27/16, it opened at $22.63, and closed at $22.38. On 6/28/16, it closed at $22.56, exactly where it started on 6/23/16, before the Brexit brouhaha started.

(Source: Yahoo Finance)

Meanwhile, the S&P 500 was busy losing over -5%, before bouncing back to -1%, and most likely scaring some fearful income investors into...