I added to my position in Linn energy by purchasing 160 shares on Friday at 39.70. Its a little more than I would have liked to pay, but a few things on that to keep in mind:
1. I plan on keeping these shares for the long haul. That being said, the dividends that an MLP pays out are not taxed, instead, they go against your cost basis, such that when you sell them, you pay taxes on the capital gains plus the distributions you received from owning them. Since is pays a distribution in the next few weeks, my new cost basis will be 38.975.
2. This is a stock I feel pretty comfortable with. They're a natural gas exploration company that has natural gas prices hedged through the next few years, meaning that the business' success hinges upon the ability to find natural gas rather than demand. I'll take my chances with that.
So what does this purchase mean for my portfolio? Well, this purchase will provide $464 of dividend income a year, which actually brings my dividend income for the next 12 months to $20,531! This purchase and some recent dividend increases, I've surpassed the 20K mark, which was actually my goal for this year! I guess my modified goal for the year is to try and get to 22K by december, but that might be a bit out of reach. Soon enough though!
No comments:
Post a Comment