(By Street Authority) By now, you've probably heard about
the biggest story in energy. New drilling technologies in natural gas exploration and production have opened the floodgates to new supplies, creating all kinds of possibilities for consumers and investors. (See
this article for an example of what I'm talking about.)
But this natural gas revolution has so far been a mixed blessing for producers, as natural gas prices have gone into a tail spin. From highs of $8 per million Btu (British thermal units) four years ago, natural gas prices at the wellhead have plummeted to a recent $2 per million Btu, the lowest point in more than a decade.
As expected, major natural gas producers are feeling the pain. Well-known natural gas players such as Chesapeake Energy (NYSE: CHK), for instance, have lost 50% of their share price in the past 12 months alone (although, to be fair, some of that has to do with bad press regarding revelations of some of management's practices).
The good news is that in the investment world, for every loser there is also a winner. So you should be thinking about buying shares of the dozens of other stocks that can profit from unusually-low natural gas prices.
Among the top beneficiaries of this trend are chemical and fertilizer producers, which are now seeing their operating costs drop as a result of the lower feedstock prices and energy costs, since many electric utilities are replacing their aging coal-burning units with new gas-fired plants.
If you believe that natural gas will remain at historically low prices for the near future like I do, then you should look into these three high dividend-paying stocks, since they're well-positioned to reap the benefits of low-cost natural gas.
1. Dow Chemical (NYSE: DOW)
Yield: 4%
Dow is a diversified chemical maker that generates $60 billion in annual sales and operates worldwide. The company makes and supplies raw materials to the specialty chemical, advanced materials, electronics, energy, agriculture and plastics industries.