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TRIPLE YOUR INCOME:

QUALITY STOCKS

YIELDING 6%-10%

BY JOHN DOBOSZ

ith interest rates at rock-bottom levels and the dividend yield on

the S&P 500 around 2%, these can be tough times for income

investors. Reaching for additional yield can often bring with it too much risk, but there are still numerous opportunities to lock in fat yields in fundamentally sound businesses.

In this special report, we highlight seven timely buys in dividend-paying stocks, master limited partnerships and real estate investment trusts that sport yields of at least 6%. That's triple the yield you'd get on the 10-year Treasury note or the S&P 500 index. In each case, the juicy yields are backed up by healthy levels of growth and cash flow at prices that represent discounted valuations from historical averages.

John Dobosz Editor, Forbes Dividend Investor

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A C O U R I E R C O R P. ( C R R C )
Yield: 5.9% Market cap: $164.7 million 12-month total return: 49.4% Annual div. per share: $0.84 P/E: 16

Founded in 1824, North Chelmsford, Mass.-based Courier is the third largest book manufacturer in the United States, providing prepress, production, warehousing and distribution services. Courier's two biggest customers are the U.K.'s Pearson, accounting for about 30% of sales, and The Gideons International, which accounted for 25% of revenue in the last year. The Gideons, of course, place its eponymous Bibles in hotels and motels, and Pearson is a big name in textbooks formed from the combination of Simon & Schuster's education division with Addison-Wesley. By sticking to areas like textbooks, Bibles and sheet music where paper is still the preferred medium, Courier has been able to keep sales steady and even growing a bit over the past three years. Revenue was up 0.8% in the 12 months ending December 2012 to $263.0 million. Latest 12 months earnings are $.088. Although that looks like a close shave for covering the $0.84 dividend, Courier generated $3.58 per share in cash from operations over the past 12 months, good for a cash payout ratio just shy of 23%. Courier has a long track record of paying dividends every quarter, and raising them significantly over time, from $0.01975 per quarter in 1990, to the current quarterly rate of $0.21, which it has paid since November 2008. With the reliable dividend, this stock looks like a great bargain with a market value below both its annual sales and book value.

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H I - C R U S H PA R T N E R S ( H C L P )
Yield: 10.2% Market cap: $506.2 million 6-month total return: -4.8% Annual div. per share: $1.90 P/E: 7

U.S. domestic oil production is surging, rising above 7 million barrels per day for the last two months of 2012, according to the U.S. Energy Information Administration. This is the highest level of crude oil production in 20 years. Daily production is expected to increase from 6.5 million barrels per day last year to 7.3 million barrels this year, and 7.9 million barrels per day in 2014. Driving a big chunk of this boost in production is the process of hydraulic fracturing, or fracking, which uses high-pressure water, sand and chemicals to break apart subterranean formations that hold crude oil and natural gas. A big supplier of the sand used in fracking is a master limited partnership that just came public last August, Houston-based Hi-Crush Partners L.P. Founded in 2010, Hi-Crush owns and operates a 561-acre facility in Wyeville, Wis., from which it sells 'frac sand' used by pressure pumping service providers in oil and natural gas wells. Union Pacific's rail network can take the sand directly from the Hi-Crush location to active oil and gas fields like the Bakken Shale in North Dakota. Sales this year are expected to rise 16.6% to $88.2 million, with earnings growing 44% from $1.60 per share in 2012 to $2.30 this year. Because Hi-Crush is structured as an MLP, it must pay out most of its net income as distributions to unitholders. Based on the $0.475 payout for the fourth quarter of 2012, HCLP is on a pace to distribute $1.90 per unit this year. If higher forecasted sales and profits do indeed materialize, you can expect the payout to keep pace and rise again. Even though Hi-Crush faces competition from companies like CARBO Ceramics (CRR) and U.S. Silica Holdings (SLCA), the expanding market for 'proppants' like HCLP's frac sand should keep the business growing.

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A L L I A N C E B E R N S T E I N H O L D I N G L . P. ( A B )
Yield: 6.7% Market cap: $2.5 billion 12-month total return: 82.4% Annual div. per share: $1.60 P/E: 47

AllianceBernstein is an investment management business structured as a limited partnership with units that trade on the New York Stock Exchange. The partnership makes quarterly distributions that vary with net income and each unitholder's pro rata share of AllianceBernsteins taxable income is reported on a Schedule K-1. Not all of the distribution is taxable income; some is a return of capital that reduces cost basis in the units. The core business of AllianceBernstein is investment management for both institutions and high-net worth individuals. Its current incarnation dates to the acquisition in 2000 of Sanford C. Bernstein by Alliance Capital, which was itself the result of a 1971 tie-up between the investment-management department of Donaldson, Lufkin & Jenrette with the investment-advisory business of Moody's Investor Services. Like all financial firms, it took its lumps during the financial crisis but its on the rebound now. Earnings are expected to rise 19% this year to $1.52 per unit, with revenue up 4.6% to $2.9 billion. Given the long history of paying distributions, its modest valuation and track record for navigating though economic cycles, Bernstein is worth a buy for yield and gains.

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TH L CR E D IT (TCR D)
Yield: 8.7% Market cap: $400.8 million 12-month total return: 32.8% Annual div. per share: $1.32 P/E: 12

Like venture firms in Silicon Valley, you have to evaluate business development companies on track record. Bostonbased THL Credit manages a $2.8 billion portfolio of investments in companies with annual revenues between $25 million and $500 million and with an EBITA of at least $5 million. It provides mezzanine financing for companies going through buyouts and recapitalizations, often in the form of loans and private investments in public equity (PIPES). Since becoming a public company in 2010, the value of shares has fluctuated between $9 and $16 in an economy that has not been booming. If current improving trends in jobs and manufacturing continue, it bodes well for the vitality of companies in THL's targeted market. Its investments tend to be in consumer discretionary, retail or technology areas, which tend to excel in an accelerating economy. Dividends rose every quarter in 2011from from $0.23 to $0.28and again in the first quarter of 2012 to $0.34. The rate dropped a penny in the last quarter of 2012 but the company also paid an additional dividend of $0.05 in December. The $0.33 rate annualizes to an 8.7% yield, which also reflects the relatively conservative nature of THL's business. Earnings are forecasted to come in at $1.41 per share in 2013, giving THL room to keep hiking the payout down the road.

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N E W M O U N TA I N F I N A N C E ( N M F C )
Yield: 8.9% Market cap: $455 million 12-month total return: 13.7% Annual div. per share: $1.36 P/E: 10.8

Buying low and selling high is the way to make money in markets, whether it's real estate, stocks or a stash of Twinkies. In the case of private equity investments, the successful application of skill and capital to opportunities yields the returns that investors crave. Of course, private equity funds are not open to everyone, with only accredited investors permitted to participate, and then usually with long holding periods and possibly even calls for additional capital. Business development companies, which are exchange-traded, offer similar opportunities for individual investors to tap into private company investing. New Mountain Finance, a business development company based in New York, has shown a spate of recent insider buying that helps burnish the attractiveness of the stock that already has shown consistency of performance and payouts in its albeit limited two-year history and its listing as a public company going back to 2011. New Mountain makes its investments in debt securities at various levels of the capital structure, including first and second lien debt, notes, bonds and mezzanine securities. It also takes equity interests, including preferred stock, common stock, warrants or options. Industries of its portfolio companies include software, health care services and products, education, business services, government services, consumer and information services, logistics, and industrial businesses. The quarterly payout has grown from $0.27 in August 2011 to its current $0.34, currently good for a yield of almost 9%. Analysts look for 24% revenue growth to $106.5 million this year, with earnings ticking up to $1.38 per share. New Mountain, like other BDCs, pays out nearly all of its earnings as distributions to shareholders to avoid taxation of profits at the corporate level.

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E N E R G Y T R A N S F E R PA R T N E R S L P ( E T P )
Yield: 7.2% Market cap: $15.1 billion 12-month total return: 8.6% Annual div. per share: $3.58 P/E: 9

This Irving, Tex., MLP is already one of the biggest names in midstream natural gas partnerships, operating nearly 20,000 miles of pipelines for gathering and transporting natural gas from the Permian Basin in Texas to the Marcellus Shale in Pennsylvania. ETP also owns facilities for treating, storing and conditioning gas. Last October, ETP got into the crude oil and gasoline business with its $5.5 billion acquisition of Sunoco to tap into a pipeline network that can move crude oil and refined products between the Northeast and refiners on the Gulf Coast. ETP offers a rich yield, but it is not financially stressed with income covering interest by a 4.1-to-1 ratio. Revenue this year is expected to rise 62.8% to $11.5 billion. Net income, aided by the Sunoco acquisition, will rocket from $1.10 per unit to $4.20. Cash generation looks to be just fine, with ETP producing $4.16 per share over the past 12 months.

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R.R. DONNELLEY & SONS (RRD)

Yield: 8.5% Market cap: $2.2 billion 12-month total return: 7.4% Annual div. per share: $1.04 P/E: NA

Based in Chicago, Ill., R.R. Donnelley & Sons is a company with roots that date back to 1864 when it was a printer of maps. Over the years, it grew and branched out into catalogs, magazines, phone books, and printing specialized financial and legal documents. Attempting to roll with the digital tide, last August it acquired EDGAR Online. In October it gained unwanted notoriety when human error on its part caused the premature release of Google's third quarter earnings results, a gaffe that likely cost the COO his job. Donnelley is a lot like previously recommended Pitney-Bowes (PBI) in that its core business is under assault from digital technology that's changing the way companies and people communicate. In Pitney's case, postage meters are not the growth business it used to be, and for Donnelley, printing is a hyper-competitive business that's become even tougher as competition from online sources of communication takes its toll. For both Pitney and Donnelley, however, the dividend yield is enormous and well covered by cash flow and earnings, making the stocks worth owning as ways to get paid to speculate on unexpected upside. How bad are things at Donnelley? The worst thing that can be said is that sales are on the decline, expected to drop 1.3% in 2013 to $10.1 billion, and earnings are forecasted to trickle lower from $1.86 per share to $1.58 next year. Even at these profit levels, however, the $1.04 annual dividend is easily met, also backed up by $3.57 in cash from operations over the past 12 months. For prudent risk management, you may want to place a stop-loss order of 10% under your position in RRD if you decide to buy.

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his diverse group of stocksspanning sectors from health care to financials to energyoffers you the best of both worlds, delivering fat dividends AND growth. Safe, high-yielding stocks like these can be the workhorses of your portfolio, dispensing a steady stream of income month after month, quarter after quarter, while also appreciating in value.

Nine months ago we launched Forbes Dividend Investor with the mission to help investors find stocks like the seven companies listed above, and the results so far have been spectacular. Just since July, weve racked up 97 double-digit winnersand one triple-digit gainer. Each one paying out a hefty dividend alongside those double-digit gains. At Forbes Dividend Investor, we use a proprietary system to find top-notch income stocks across all sectors, including: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Price-to-sales superstars Low PEG heroes Momentum-sale gainers Book-value bargains Beaten-up blue-chip recoveries Cash-rich companies Stocks priced under $10 Nasdaq rockets Global giants And more!

Each week, I bring my readers two companies offering payouts that can not only double, triple, and even quadruple your income over CDs, Treasury bills, and low-yield stocks but also hand you the kind of mammoth total returns that can build your wealth over both the short and long terms.

BECOME A FOUNDING MEMBER TODAY!

To celebrate the market stomping returns Forbes Dividend Investor has generated in our first six months, were re-opening the subscription rolls at our special Founding Membership levels. For a limited time, you can try Forbes Dividend Investor for only $99. Thats a savings of 60%! As a Founding Member, youll receive: l Two high-yield dividend plays a week with yields as high as 18%. Previous recommendations have returned as much as 157%. l Complete research that shows how we selected each investment, why we like it and the kind of payout you can expect. l Our complete fundamental and technical analysis on each recommendation thats worth its weight in gold. l 24/7 access to our private Forbes Dividend Investor Web site that includes an archive of past picks along with numerous special reports designed to make you a better investor. l PLUS: Lifetime Founding Member status which means youll NEVER pay the full rate! Thats because as a Founding Member youll not only lock in our 60% discount off the first year but also

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John Dobosz Editor, Forbes Dividend Investor P.S. This special Founding Members $99 offer is only available for the next five days, so dont delay! Claim your 60% savings here.

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