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5 Dividend Stocks That Could Double Your Money in 10 Years

MMLP Dividend Chart
MMLP Dividend Chart

MMLP Dividend data by YCharts .

3. Annaly Capital Management : 10.61% trailing 12-month yield

A $10,000 investment in Annaly Capital Management with all dividends reinvested would be worth $27,412 after 10 years.

Annaly Capital Management is a mortgage real estate investment trust, or mREIT, and it makes money on the difference between the rate at which it borrows and the rate at which it relends funds. For mREITs like Annaly, lower interest generally mean greater profit for the company. If interest rates rise, as they are widely expected to in 2015, it could squeeze Annaly's net interest margins and profitability somewhat and may lead to a smaller dividend. On the bright side, it looks as if the Federal Reserve will remain gentle with its use of monetary policy tools for years to come.

Also working to Annaly's advantage is the fact that it can leverage its portfolio considerably more than some of its peers because it invests solely in agency-only mortgage-backed securities, which are guaranteed by the U.S. government. In sum, nothing short of a marketwide housing meltdown could wreak havoc on Annaly's MBS portfolio.

4. SeaDrill : 11.66% trailing 12-month yield

A $10,000 investment in SeaDrill with all dividends reinvested would be worth $30,128 after 10 years.

West Tucana drilling rig. Source: SeaDrill

SeaDrill is an offshore drilling specialist with one of the youngest fleets in operation, which gives it an automatic leg up on its competitors and compels integrated oil companies to sign longer-term contracts with SeaDrill. In addition, it also helps SeaDrill earn comparably higher dayrates than its peers, which are operating 20- or even 30-year-old rigs, which are far less efficient.

The headwind investors will want to keep an eye on is SeaDrill's $13.6 billion in debt -- buying new rigs isn't a cheap venture. However, so long as oil (a finite resource) maintains its high price point, global energy demand grows , and deep-sea finds remain robust, there's no reason to believe SeaDrill can't continue to pay out its incredible dividend.

5. Chesapeake Granite Wash Trust : 24.52% trailing 12-month yield

At the current dividend yield, a $10,000 investment in Chesapeake Granite Wash Trust with all dividends reinvested would be worth a staggering $89,617 after 10 years! By comparison, simply pocketing the dividends would leave you with just $34,520 (along with your original investment).

Chesapeake Granite Wash Trust is an oil and gas royalty trust operating out of the Anadarko Basin in western Oklahoma. As Foolish energy specialist Tyler Crowe pointed out in June , royalty trusts are a lot like MLPs, but they come with even better tax perks in that their distributions are taxed as capital gains, and because you're part owner of the wells in a royalty trust's portfolio, you can depreciate your "assets" to lower your cost basis, potentially making you eligible for other tax credits.

Unlike a number of its peers, however, Chesapeake Granite Wash Trust is abundant in natural gas assets, which have lower price points and tend to be more volatile than oil. For investors, it means they could see fluctuations in the quarterly disbursements if natural gas prices dip considerably. Nevertheless, so long as investors keep in mind that royalty trusts only have a finite asset-recovery lifespan (in this case through mid-2031) and that energy demand in the U.S. will likely increase, then they could do pretty well with this incredible yield.

Want more high-yield dividend ideas? How about these picks from our top analysts?

The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now .

The article 5 Dividend Stocks That Could Double Your Money in 10 Years originally appeared on Fool.com.

Sean Williamshas no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.The Motley Fool owns shares of, and recommends Seadrill. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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