Military Mission at twilight
Let’s talk about oil and gold dividends. Whether or not the new peace in the Middle East holds, there are some high-quality dividends worth owning anytime. These generous payers (up to 8%!) provide peace of mind just in case the geopolitical Jenga set gets knocked loose again.
We’ll start with crude, which had rallied to one-year highs. I was originally going to advise not chasing the “Strait of Hormuz” oil rally. Futures indicated (and still do) that lower prices are likely ahead. January 2026 still trades cheaper—suggesting temporary disruption at worst.
Back at home, you’ve probably heard (not least from me, often) that President Trump wants a lower Fed Funds Rate! To achieve this, he and Treasury Secretary Scott Bessent are targeting lower oil (“drill baby, drill”) so that inflation continues to cool and the Fed can ease.
Given policymakers’ penchant for deregulation and drilling, it’s best to sidestep the producers here. We have done well owning Exxon Mobil (XOM) in the past but the time to buy the stock is when oil prices are likely to rise. Exxon has grinded sideways since we sold it from our Contrarian Income Report portfolio.
4 Dividends to Consider Today
Let’s consider Kinder Morgan (KMI) and its 4.2% yield instead. Kinder funds its dividend by “collecting tolls” on its 79,000 miles of pipelines. Crude oil and most notably natural gas flow through Kinder’s North America pipelines. As long as energy moves, the cash flows.
A huge 40% of US natural gas flows through Kinder’s systems to 139 company-owned terminals storing petroleum products, chemicals and renewables. With market share like this, Kinder can raise its pricing regularly and therefore boost dividends often too.
When the company was founded back in 1997 (or “back in the 1900s” as my kids say) by Richard Kinder and William Morgan, they structured it as a master limited partnership (MLP). MLPs issue K-1 forms at tax time, which can be a bit of a headache. Instead of forcing shareholders into a lifetime of tax-time headaches, Kinder converted into a simpler corporation in 2014.
Corporations issue a traditional 1099, which is easier for accountants and users of tax software. This move made Kinder more popular and awarded it a perennially higher valuation.
For those of us who prefer lower valuations (and higher yields), Alerian MLP ETF (AMLP) is an elite 8% dividend play. Alerian buys MLPs and packages them into one fund, consolidating messy K-1s into a neat 1099 at tax time—a “cheat code” for easy 8% energy dividends.
These are salad days for Alerian, too. The fund has raised its dividend for three straight quarters!
AMLP Dividend
Let’s move on to gold, the “barbarous relic” that investors buy when they feel nervous. We contrarians are bullish because:
- US government debt has increased 100% over the last decade.
- And debt levels are still growing by 7% per year.
Creditors will be paid back, because the US owns the global printing press. But they will ultimately receive depreciated dollars due to some “monetization” of this massive debt load.
The US dollar is already eroding, falling 28% versus gold year-to-date. Twenty-eight percent! A shiny sign of capital flowing into assets immune to central bank printing.
VanEck Gold Miners ETF (GDX) is a one-click way to play higher gold and lower oil prices. Energy is the main cost input for gold miners. Profit margins will expand from here if gold stays high and oil slumps.
A high-quality discounted alternative is GAMCO Global Gold, Natural Resources & Income Trust (GGN), a closed-end fund trading at a 2% discount to its net asset value. About half of the fund’s portfolio sits in mining stocks—both gold and non-gold plays like iron miner Rio Tinto (RIO). Thanks to the deal we can snag these stocks for 98 cents on the dollar.
GGN pays a steady 3-cent monthly dividend (8% annualized), giving investors income stability with upside potential.
Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: How to Live off Huge Monthly Dividends (up to 8.7%) — Practically Forever.
Disclosure: none
