"Fording Canadian Coal Trust is an open-ended mutual fund trust and one of the largest royalty trusts in Canada. The trust makes quarterly distributions to unitholders using royalties received from its 60% interest in the metallurgical coal operations of the Elk Valley Coal Partnership.
"It is a beneficiary of the booming global steel industry where FDG's business is concentrated. Despite interruptions in coal production and delivery that may cause wild price swings, the underpinnings to the supply and demand equation for metallurgical coal are solidly bullish.
"Frontline Ltd. (NYSE: FRO) is the 'mac daddy' of the oil transport business," says growth and income expert Bryan Perry, who has added the shares to the model portfolio of his 25% Cash Machine.
"Frontline is doing a much better job of executing profits in the current market for transporting crude oil. FRO posted first quarter results that showed a jump in profits of 40%, with a dividend hiked to $2.75 for the quarter. That translates into a current annual yield of 18.25%. Even better, the company forecasts continued strength in operations and quarterly distributions.
"This kind of profit growth is a result of FRO being leveraged to the spot market for day charter rates for double-hull tankers. The company is by far-and-away the largest shipping company, with 76 vessels and a market cap of $4.4 billion.
"Provident had third-quarter results that illustrate the value of its diversified-energy portfolio, as it increased production and maintained stable distributions in the face of persistently weak natural gas prices and a rising Canadian dollar.
"Total funds flow from operations of $105 million (43 cents per unit) for the quarter underpinned stable distributions. The negative impact of weak natural gas prices and the rising Canadian dollar in the third quarter were partially offset by strong oil prices, higher production and midstream crack spreads.
"Consolidated oil and gas production in the third quarter increased by 26% over 2006 to 38,800 boe per day, which includes the results of acquisition and drilling success in Canada and acquisitions in the United States.
Through a combination of capital gains and dividend yield, the goal of The 25% Cash Machine is to generate 25% annual returns from a combination. Editor Bryan Perry is now building a new position for this portfolio: Cheniere Energy Partners (NYSE: CQP), a play on liquefied natural gas (LNG).
The advisor explains, "LNG is natural gas -- the same clean, safe energy source used to fuel our homes and industries -- that's been reduced to 1/600th its volume through a sophisticated refrigeration process. In liquid form, natural gas can be shipped long distances safely and economically in specially designed ships with insulated storage tanks.
"World demand for liquefied natural gas is expected to double by 2010. The reason demand for LNG is growing is that it is viewed as safe, flexible, reliable, and economical. One other big (perhaps the biggest) plus in the current (and growing) green climate is that LNG is environmentally acceptable.