Tags: Hutchinson | natural | gas | election

Tom Hutchinson: Natural Gas to Be a Winner No Matter Who Elected President

Friday, 26 Oct 2012 02:04 PM

Those in search for investment income should look within the natural gas industry regardless of who wins November’s presidential elections, said Tom Hutchinson, editor of Newsmax’s advisory service The High Income Factor.

Neither President Barack Obama’s energy policies nor those of GOP hopeful Mitt Romney will prevent natural gas companies from growing.

“The amount of fossil fuel available to us has grown exponentially since 2008, and a lot of it is natural gas,” Hutchinson tells Newsmax TV in an exclusive interview.

Watch our exclusive video. Story continues below.



“It’s cheap and clean-burning. … If Romney wins, obviously he wants to be energy independent, but even if Obama wins, he’s even made overtures of moving a little bit more towards natural gas. I know he likes clean energy, but it’s a great compromise”

Don’t expect quick changes in energy policy after the elections, as the sector is a long-term play.

“Natural gas is still cheap now, the global economy is not in great shape, we really don’t have a comprehensive energy policy in place to really use, so most of the natural gas story is a little bit further into the future,” Hutchinson said, pointing to Williams Partners (WPZ) as an example of a natural gas company poised to provide solid returns.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

“Not only is it making money now, it pays a high dividend, which is what income is all about, at about 6-plus percent, and they are going to grow their dividend 8 percent this year and 8 to 10 percent in 2013 and in 2014,” Hutchinson said.

“The key is that it’s solid right now and it should provide a great income in a defensive investment. Longer term, the future is huge.”

The company is active in natural gas piping, storage and in infrastructure.

Amid today’s times of very low interest rates, many investors have looked to dividend-paying stocks for yield.

That’s wise, but also look at dividend growth as well, either in natural gas companies or elsewhere.

“The growing dividend is key because over time it shows the company has an emphasis on paying a dividend, the management is committed to it, the company is growing its earnings —you want a company that is growing. It’s really sign of financial health,” he said.

“The companies that are most apt at growing their dividends are usually the best places to be.”

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

Turning to elections, look at both candidates’ policies carefully, especially when it comes to taxes, Hutchinson urged.

Romney, for example, has called for cutting taxes but plugging in loopholes, which could affect investments in certain vehicles, possibly including real estate investment trusts or master limited partnerships.

Right now, it’s too early to tell.

“There is a little bit of a danger here with special tax structures. One of the dangers of a Romney win is that he has mentioned he wants to lower the tax rate and close a lot of the loopholes,” Hutchinson said.

“There’s a lot of loopholes.”

Obama, however, has called on raising taxes to drum up government revenue, especially on wealthier Americans and their investment income.

“With President Obama, the problem is with the taxes, specifically taxes on dividends, because he wants to raise the top rates back to pre-Bush tax cut days,” Hutchinson said.

Add to that new taxes outlined in the president’s Affordable Care Act, and tax uncertainty looms even larger.

“The dividend tax is at a maximum 15 percent right now, and for the highest payers, that is going to go all the way up to 38 to 39 percent, plus the special tax on Obamacare. The bottom line is for the upper income investors, dividend taxes can triple and it won’t just affect the upper echelon investors, it will affect everybody.”

About: Tom Hutchinson

Tom Hutchinson is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of The High Income Factor. Discover more by Clicking Here Now.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
Markets
Those in search for investment income should look within the natural gas industry regardless of who wins November’s presidential elections, said Tom Hutchinson, editor of Newsmax’s advisory service The High Income Factor.
Hutchinson,natural,gas,election
686
2012-04-26
Friday, 26 Oct 2012 02:04 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved