Dear Mr. Berko:

I’m bored stiff with my large portfolio of municipal bonds and short-term Treasury issues. Is it possible for you to recommend some honest-to-goodness stocks that will give me at least a 7 percent current dividend yield and have some opportunity for appreciation? I’m disgusted with municipal bonds (what a bore, and all they do is lose value), and I want to own something that might go up in value, not down. Can you put a little investment excitement into my life?

L.S., Springfield, Ill.

Dear L.S.:

Sure I can. It’s as easy as falling off a piece of cake.

First take a peek at Great Plains Energy Inc. (GXP-$28.69), a $2.6 billion (in revenues) holding company for Kansas City Power & Light Co. Why those turkeys at Kansas City P&L changed the company’s name to Great Plains puzzles me. But GXP has indicated to Wall Street that it will complete about $1.25 billion in capital expenditures by 2010 and expects to increase its rate base by 60 percent in the coming five years. In the process, GXP will have to raise about $700 million — about 75 percent of that money will come from equity financing — with a partial secondary offering expected sometime this year.

The company serves more than 500,000 customers in western Missouri and eastern Kansas. Assuming modest regulatory treatment, this expansion should greatly enhance GXP’s earning power and dividend performance but the benefits are probably four to six years out. Due to a much higher tax rate, earnings will decline sharply for the next few years. Although GXP’s payout ratio will be quite high, the dividend is definitely not at risk and the stock is a splendid income pick with good potential long-term price appreciation. Though the dividend should remain at $1.66 for the coming few years, I believe it might be raised nicely after 2009. So get on your skateboard, dash to your broker’s office and get 200 shares.

Now I’d like you to consider Healthcare Realty Trust Inc. (HR-$37.56), a $270 million revenue real estate investment trust that owns and operates real estate properties and mortgages in the health-care-services sector. This business, many investors believe, is as recession-proof as Fort Knox, the Philadelphia Mint and the U.S. Treasury because the federal government is this sector’s designated patsy. Though the acquisition environment has become difficult due to higher prices, HR is now making investments in smaller medical offices and senior living facilities with smaller acquisitions in the $25 million to $50 million range. HR has a solid $22 book value, a superb 21 percent net profit margin and its $2.64 dividend (which I expect may be increased annually for the foreseeable future) yields a warm, fuzzy 7 percent. I am required to inform you that I, as well as many of our managed accounts, own shares of HR. So tiptoe to your broker and buy 150 shares.

It would be a serious omission if I failed to include Enterprise Products Partners (EPD-$24.79) on this list of good dividend income stocks. EPD, with a whopping $11.5 billion in 2005 revenues and a $1.75 dividend that yields 7.1 percent, is one of the leading integrated providers of natural gas and natural gas liquids processing, fractionation, transportation and storage services in the United States. Many on Wall Street believe that EPD may be among the best-performing master limited partnerships over the coming few years. Its recent GulfTerra purchase was a masterstroke and presents the company with a superb opportunity for internal growth. Meanwhile, a natural gas storage facility in Mississippi will be completed this year and construction will commence soon on a deep-water, $130 million oil and gas project. I believe that EPD’s revenues, earnings and dividends will present shareholders with exceptional performance over the next few years, and I also believe that the stock could trade in the high $40s to low $50s by 2009 or 2010. I am required to tell you that I and many of our managed accounts own shares in EPD. So parachute downtown and buy 200 shares.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.

© Copley News Service