8 High-Dividend Stocks With Upside

4. Linn Energy (LINE) is an independent oil and natural gas company operating in five regions of the U.S. - Mid-Continent Deep, Mid-Continent Shallow, Permian Basin, Michigan and California.

Linn paid a quarterly cash dividend of 69 cents per share ($2.76 annualized) for the second quarter 2011, increasing 5% from 66 cents per share in the first quarter of 2011, and a 10% increase from the year-ago quarter. The company's chief executive said that the 5% increase reflects Linn's acquisition success, significant organic growth, and positive outlook for the future. With a current dividend yield of 6.7%, the company has a record of consistently paying 22 quarterly distributions that increased by almost 73% since the company's initial public offering. The five-year net growth rate for dividend per share stands at 30%.

For the second quarter of 2011, the company reported net income of $237.11 million, or $1.34 per share, compared to $59.79 million, or 41 cents per share, in the year-ago quarter. For the quarter, adjusted EBITDA increased 50.7% to $263.3 million from $174.9 million in the same quarter 2010. During the quarter, average daily production increased 40% to 358 MMcfe/d from the same period prior year.

The company estimates 2011 average coverage guidance of approximately 1.25 times, including the 5% distribution increase. With its organic growth program on track, Linn Energy expects to generate 30% growth year-over-year.

Of the 13 analysts covering the stock, 92% recommend a buy and the rest suggest a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg foresee the stock gaining an average 25.3% to $45.00 in the upcoming 12 months.

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