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Justin Kuepper

Royalty Trusts Offer Alternative to Dividend Stocks

By January 22, 2013

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Dividend stocks have been on the rise over the past couple years, thanks to record low interest rates in the U.S. But with the end of quantitative easing in sight, investors may want to consider alternative asset classes that are backed by robust commodity demand.

Royalty trusts are corporations organized similar to real estate investment trusts in that they avoid double-taxation by distributing the majority of their profits. The result is a high dividend payout and a relatively steady income stream that depletes over time.

Some royalty trusts to consider include: BP Prudhoe Bay Royalty Trust (NYSE: BPT), Cross Timber Royalty Trust (NYSE: CPT) and Dominion Resources Black Warrior Trust (NYSE: DOM).

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