Investing

Solid December for Dividend Hikes and Big Stock Buybacks

December can be an odd month for many investors and corporations alike. While tax planning can always come up as an issue for investors, and while December can be a slow month on other fronts, many dividend plans and buyback plans for the following year get announced. 24/7 Wall St. has seen some dramatic news for the start of December when it comes to higher dividends and large stock buyback announcements.

There may be some good news on top of good news here. The dividend hikes and buyback announcements likely will continue coming for the next week or two, and then the news flow probably will take a back seat to the holidays. These are the top dividend hikes and stock buybacks tracked by 24/7 Wall St. for the start of December. Dividend hikes and stock buybacks are the two most popular methods of returning capital to shareholders under corporate governance plans. Again, there will be more dividend hike and stock buyback announcements this month.

Walt Disney Co. (NYSE: DIS) was the first of the five big Dow Jones Industrial Average (DJIA) dividend hikes we expect for December. What was impressive here was that Disney’s dividend hike blew our expectations out of the water. Perhaps it was all the excitement and buzz around the new Star Wars promotion for 2015 that gave the company confidence. Either way, Bob Iger has done an absolutely wonderful job, and the stock sure feels as though Disney is on the path to being the next $100 DJIA stock. Disney’s yield remains perpetually low, but some of that is due to its stock rally never coming to an end.

ALSO READ: Intel’s Surprise Dividend Hike (Late November)

Kinder Morgan Inc. (NYSE: KMI) is now the post-merger Kinder Morgan. It has been under a cloud of lower oil prices just like the rest of the sector. The good news is that Kinder Morgan came out in the first week of December and outlined its dividend budget of $2.00 per share for 2015. The announcement was with a lower expectation on the price of oil, and it did not include the double-digit growth assumptions (but that was also not thrown out either). This news was important because the merger closing date took place around Thanksgiving and was within days of the most recent low in oil prices.

MasterCard Inc. (NYSE: MA) delivered on its dividend growth and stock buyback plans, and it is effectively mirroring dividend and buyback moves by rival Visa Inc. (NYSE: V). The companies are both saying: what worry about Apple Pay! MasterCard’s dividend yield still sounds low, but the percentage gain was by 45% to $0.16 per share per quarter. The company also approved a $3.5 billion stock buyback plan, on top of the more than $200 million remaining under its existing stock buyback plan.

Enbridge Inc. (NYSE: ENB) showed that the Canadians might not be too worried about lower oil prices either. This pipeline outfit for natural gas liquids and oil products raised its dividend by a whopping 33%. Enbridge also said that its board of directors is considering a 67% interest transfer in the U.S. segment of the Alberta Clipper pipeline to Enbridge Energy Partners, which if approved, is expected to be completed by the end of 2014. That could lead to more good news in 2015.

ALSO READ: Credit Suisse’s Top MLPs to Buy for 2015 as Oil Tumble Continues

ONEOK Partners L.P. (NYSE: OKS) is a high-yield master limited partnership (MLP) with a distribution rate (yield equivalent) of roughly 7%. With oil prices having fallen from over $100 down to well under $70, this MLP’s units have fallen by about one-third before recovering lately. The ONEOK outfit said this last week that its long-term distribution targets remain in place. The firm’s capex guidance seemed high, but 2015 guidance on the distribution, discounted cash flow and EBITDA seem fine. ONEOK Partners also communicated that it expects its distribution growth to be 6% to 8% from 2014 to 2017. If that holds true, the buyers now of the 7% yield could be sitting on closer to a 9% yield in 2017.