Are Big Dividend, Big Oil Stocks the Best Bet for Big Income?
NEW YORK (TheStreet) -- For dividend income, it is tough to beat Big Oil stocks such as BP
This method for buying dividend stocks was detailed in a previous article on TheStreet, "Hunting for Higher Dividends."
Stocks with a high beta move more than the market as a whole, which has a beta of 1. When the share price drops, the dividend yield becomes that much higher. The beta for BP is 1.62. That means that the stock price moves 60% more for BP than the overall stock market. For Royal Dutch Shell, beta is 1.08. ConocoPhillips has a beta of 1.08.
Having a higher beta hardly means that these companies have a higher risk of failure, though.
Royal Dutch Shell, with a market capitalization of $232.6 billion, is the second largest oil and natural gas company in the world behind only Exxon Mobil
The dividend income component of BP, ConocoPhillips and Royal Dutch Shell really impresses.
The dividend yield for BP is 4.73%. For Royal Dutch Shell, it is 4.64%. ConocoPhillips provides a stream of dividend income to its shareholders at a 4.09% rate.
Due to how much the shares move for these equities, investors can buy the stock at a lower price with a higher dividend yield.