Five Percent Yield through Multiple Sectors (MSB, ARLP, CAT, BUCY)

In their Growth Plus Income model, managers BSG&L look for a target yield of 5 percent with bond ETFs and dividend-paying stocks. Their holdings can stretch across multiple sectors and investments. They target overweight sectors and look to income positions to reduce risk. Income producing positions are held in the model for at least as long as the income distribution is static.

The top holding in the model is Mesabi Trust (NYSE: MSB). According to, the trust’s activities include the collection of income and the payment of expenses and liabilities and the contents of the trust’s reserves include about 1.5 billion tons of raw, mineable material. showed a 6.89 percent dividend yield for MSB on December 6, 2010.

Another top holding in the model is coal producer and marketer Alliance Resource Partners LP (NASDAQ: ARLP). According to their website, ARLP is the only publicly traded master LP in the coal-producing industry. On December 6th, reported their dividend yield as 5.19 percent. On April 28th, 2010, one of the mines operated by an ARLP independent operating subsidiary had a roof fall accident that resulted in fatalities. On October 7th it was reported that the Mine Safety and Health Administration found the mine compliant at the time of the accident.

Caterpillar Inc (NYSE: CAT) is another large position in the model. CAT has a smaller dividend yield than many of the other top positions in the Growth Plus Income model. On December 6th, reported CAT’s dividend yield as 1.97 percent. On November 15th, CAT announced that they would be acquiring Bucyrus International Inc (NASDAQ: BUCY) in 2011. Since that time, CAT has reached a new, all-time high price. According to Yahoo! Finance, CAT had a closing price of $89.38 on December 3rd.