Pope Resources A Delaware LP: Forever Asset Now Yields 4%
1 Top Dividend Stock for Retirement Income
Today’s chart highlights my favorite place for steady retirement income: “forever assets.”
I coined the term to describe an elite group of stocks that have stood the test of time. Many of these wonderful businesses have rewarded owners for generations. If you’re looking for reliable dividends, then forever assets should form the base of your portfolio.
Case in point: Pope Resources A Delaware LP (NASDAQ:POPE). This firm owns 111,000 acres of timberland across the Pacific Northwest. And while it gets little coverage in the press, the name tops my list of forever assets for a couple of reasons.
First, you have to love this timeless business. Trees don’t care about stock indices. Pope doesn’t deal in credit default swaps and mortgage-backed securities; if the sun shines, your investment grows. In a good year, trees grow up to six percent. This provides a built-in security not found in the stock market.
Better still, you own a renewable resource. Unlike a mine, trees can grow back; you don’t have to spend billions of dollars searching for the “next big strike.” Owners can kick up their feet knowing that their land will crank out cash flow decade after decade.
If lumber prices drop, you can just “bank it on the stump.” The phrase comes from the industry lingo for just letting your acreage grow. You can just wait for a better time to harvest your crop.
Finally, units provide a reliable source of retirement income. Because of the way this firm has legally structured itself, Pope Resources pays no corporate income taxes. In exchange for this benefit, however, management must pay out most of their profits to owners.
Today, Pope Resources pays a quarterly distribution of $0.70 per unit, which comes out to an annual yield of four percent. Check out the long-term uptrend in the chart below. Such success proves that forever assets like timberland can make owners a fortune.
Of course, I’m not the only one bullish. High-net-worth investors have poured billions of dollars into timberland since the financial crisis. They see these assets not just as a source of income, but also as a tool to transfer wealth from one generation to the next.
For good reason. Pope Resources has survived wars, bank panics, and stock market crashes. This is one forever asset to own for the next 100 years.