AT&T Inc. (T), Royal Dutch Shell plc (ADR) (RDS.B), Kinder Morgan Energy Partners LP (KMP): Three Highly Profitable, 5% Yielding Dividend Stocks

The price of oil itself is not a huge factor for an oil and gas MLP like Kinder Morgan Energy Partners LP (NYSE:KMP), which has raised its distribution in good times and bad over the past several years. To illustrate, consider that the company has increased its distribution every quarter since 2010. In fact, the partnership’s last quarterly distribution was 8% higher than the same distribution one year prior.

Moreover, the great thing about MLP’s is that they are required to distribute the bulk of their cash flows as payouts to unit holders in exchange for a favorable tax structure. That’s why, even in today’s low-rate environment, Kinder Morgan Energy Partners LP (NYSE:KMP) yields more than 6% at recent prices.

There’s still safe yield to be found

Investors looking for income in today’s investing environment don’t need to chase yield from speculative companies with collapsing stock prices. AT&T Inc. (NYSE:T), Royal Dutch Shell plc (ADR) (NYSE:RDS.B), and Kinder Morgan Energy Partners LP (NYSE:KMP) are all extremely large, profitable businesses that provide products and services we use on a daily basis.

In particular, Royal Dutch Shell plc (ADR) (NYSE:RDS.B) and Kinder Morgan Energy Partners LP (NYSE:KMP) look especially attractive to me. I’ve initiated a position in KMP in recent weeks, and I’ve added Royal Dutch Shell to my watch list. Should the stock fall any further, I’ll be very tempted to step in and buy.

On AT&T Inc. (NYSE:T), while I appreciate the stock’s 5% yield, it’s worth noting that the stock has rallied considerably in a relatively short period of time. I’d advise investors to wait for a pullback, but if the stock approaches a 5.5% yield, it would be a good buying opportunity. In all, with the help of these three stocks, investors can still secure 5% yields. Even in today’s market, you can provide your portfolio with significant income for many years.

The article Three Highly Profitable, 5% Yielding Dividend Stocks originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura owns shares of Kinder Morgan Energy Partners LP. The Motley Fool has no position in any of the stocks mentioned. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.