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There are various kinds of mining stocks that pay dividends to investors, offering a steady stream of income. Dividend paying coal stocks offer a safe investment during volatile market fluctuations. The commodities market benefits from an unstable economy because people rush to invest in things that the public will purchase regardless of economic conditions. The fact that the stock pays a dividend provides the investor with the comfort level that income streams should continue during market downturns.

However, investors should be aware that just because a coal company offers a nice dividend now does not mean this practice will continue. Companies can reduce or halt their dividend payments at any time so investors should not rely on dividend payments as a source of income. In addition, excessively high dividend payments may signal that a company is in financial distress.

Standard & Poor’s Capital IQ Coal and Consumable Fuel Industry group contains several high yield dividend stocks. These include:  Penn Virginia Resource Partners, Alliance Resource Partners, Natural Resource Partners, Progress Energy, CH Energy, DTE Energy, TECO Energy, Alliance Holdings, and Vectren. Investors should research the performance of each of these to get an idea of the type of returns provided.

Major coal stocks with lower dividend yields can also be found. Arch Coal Inc., Consol Energy Inc., Foundation Coal Holdings, Inc., Massey Energy Co., Peabody Energy Corp., and Yanzhou Coal Mining Co. Ltd. represent a sampling of the available options. Though the yields may be low, sometimes the best time to purchase stocks is when they are not looked upon favorably.

The fact that a stock pays a dividend does not automatically make it a wise investment. Research should be done into the company history, financial standing, and stock performance trends. Though a dividend is never guaranteed, it can be especially nice to receive when the economy is in a recession.