Best natural gas stocks with high dividends

Diversifying into natural gas stocks with high dividends in 2013 is a great way to generate income, it also has potential for capital growth. 2013 has seen a great rally for natural gas which is an alternative to Brent Crude Oil. As Brent Crude oil rises more and more companies look at alternative sources of energy to cut costs and natural gas is one of the best alternative energy sources that are much cheaper than crude oil. Energy companies tend to perform well when the markets rise and countries emerge out of recessions and produce more thereby needing more energy.

Investing In Natural Gas Stocks

Natural gas is a great choice if you want to strike a balance between income and capital growth. Before you even consider looking at building or adding to your portfolio there are five hurdles that you have to jump which will help you to choose the right stock.

These hurdles include fundamental analysis, technical analysis, risk management, money management and hedging. If you can choose the stocks while paying close attention to these five factors you’ll be able to build a robust portfolio that stands the test of time and has the ability to survive bear markets and flourish during bull markets.

How to Invest in Natural Gas Stocks

I have added a list of natural gas company stocks with high dividends; you can invest in natural gas stocks through brokers such as Optionsxpress.com or CMCMarkets.com.

All the stocks in the list have dividends between 4% and 2% and if chosen well can give you continued dividends and growths. Before you buy these stocks you need to fundamentally analyze these stocks, fundamental analysis is the process by which you assess the financial strength of a company.

If you want to learn about fundamental analysis then the educational resources on StockCharts.com is a great place to learn. Some of the key questions that you need to ask are as follows;

(1) what is the market capitalization of the company?

(2) How long has the company been trading in the stock market?

(3) Do you really believe in the product or service?

(4) How long has management been in place?

(5) What is the PE Ratio, PEG Ratio, Net Asset Value?

(6) How much money is investing in research and development?

By asking these fundamental questions you’ll be able to separate weak companies from strong companies and then rank them according to strength, this will help you to choose stocks by striking a balance between respectable dividend yields and financial strength.

Energy Stocks With High Dividends

Once you’ve fundamentally analyzed your energy stocks with high dividends you need to analyze them using technical analysis. Buying cheap natural gas stocks with high dividends at the right price will help you make more profit and spend less time in loss making positions. Technical analysis is the process by which you predict the future movements of a stock by looking at the past price history.

If you can buy the stock at the support price then you’ll get your portfolio off to a flying start. Some of the indicators that you can use to find price levels are

(1) Exponential Moving Averages,

(2) Simple Moving Averages,

(3) Parabolic SAR and Bollinger Bands,

(4) Fast Stochastic & Slow Stochastic,

(5) Relative Strength Index RSI, and

(6) Moving Averages Convergence Divergence.

Once you’ve fundamentally analyzed your stock and then technically analyzed your stock you’ll be in a position to start trading once your opening prices are reached.



Natural Gas Dividend Paying Stocks through Hedging

Risk management is very important when it comes to building a stock portfolio, if you have two stocks that are paying 10% and stock A has 40% volatility and Stock B has 10% volatility then it’s logical to choose stock B as it’s less volatile. Some of the indicators that you should use to assess risk are volatility, alpha, beta, and gamma. Your aim is to build a portfolio that gives you good returns for the lowest risk levels; this means that even if the stock market declines sharply your portfolio should remain unaffected.

When investing in the natural gas dividend paying stocks you need to have an effective money management strategy where you’ve planned for every contingency. Some of the key questions that you need to ask yourself are as follows:

1. Should I reinvest the dividend payments back into the portfolio?
2. What shall I do if the portfolio starts to rise?
3. What shall I do if the portfolio falls 10%, 20%, or even 30%?

Having answers to these questions will not only help you sleep well at night it will also ensure that your portfolio will have the capability to ride the bull and bear markets.

Every portfolio should have an effective hedging strategy, you’re portfolio will only rise in value and pay better dividends if the markets rise, if the markets fall then the portfolio will fall. If you can predict with success all the times the market will fall or all the times natural gas prices will decline you can hedge your portfolio to offset or mitigate the risk. If you can buy natural gas puts or index puts every time the market falls your portfolio should be protected, as the market decline your portfolio falls in value however your natural gas puts or index puts should mitigate or offset the losses.



Natural Gas Stocks with High Dividends

Adding natural gas stocks with high dividends to your portfolio is a great way to diversify and get exposure to a rapidly increasing energy sector. Most analysts are predicting a market rise in 2013 which means that natural gas companies should fare well and pay good dividends. If you can take all the factors such as fundamental analysis, technical analysis, money management, risk management and hedging into account when building your portfolio of natural gas stocks with high dividends you should do very well in the long run.