With the global growth slowing and with the volatility increase seen in the past three months, and with a coming rate hike cycle, many investors have wondered how to position their portfolios now that the bull market is approaching its seventh year. Many investors are looking for companies paying dividends. In fact, companies raising dividends are often a focal target when considering that one-third to two-thirds of total returns come from dividends.
24/7 Wall St. recently highlighted nine great companies which can raise their dividends for the next decade. While these were not among that list, six well-known companies raised their dividends after the close of trading on Wednesday. So much for that slowdown worry, maybe.
Here is how much more shareholders of Crown Castle, Kinder Morgan, Las Vegas Sands, ONEOK, Seagate and Visa will be collecting in dividends ahead.
Crown Castle International Corp. (NYSE: CCI) reported earnings that beat the high-end of its previous third quarter outlook and it increased the mid-point of expected 2015 guidance after strong third quarter results and to account for its Sunesys acquisition. It now sees funds from operations growth of 8% in 2016. As such, Crown Castle announced an increase to its annual common stock dividend to $3.54 from $3.28 per share.
The new $0.885 per share per quarter payout will take effect with the Crown Castle dividend payment on December 31, 2015. Crown Castle’s dividend will now rise to 4.25% based upon the $83.13 close, versus a prior yield of 3.95%.
Kinder Morgan, Inc. (NYSE: KMI), the former MLP that is now structured as a corporation, was one of the companies some might worry about the dividend due to its exposure to oil. Kinder Morgan dispelled such noise as it has increased its quarterly dividend by 16% up to $0.51 per share, and here was the 24/7 Wall St. earnings analysis.
The company further said that its remains on track to meet full-year dividend targets of $2.00 and with substantial excess cash coverage. Kinder Morgan said that it further expects to hike its declared dividend for 2016 by 6% to 10% over the 2015 target of $2.00 per share.
The Kinder Morgan quote does outline some exposure to oil price — While we are largely insulated from commodity price impacts due to our predominately take-or-pay supported cash flows, we are not totally immune. The company has said that it has identified alternative sources of capital and has selected one to meet its equity funding requirements for the rest of 2015 and for the first half of 2016 as a means to eliminate the company’s need to access the common equity markets through mid-2016. The new annualized payout will be 6.5% yield based upon a $30.90 closing price.
Las Vegas Sands
Las Vegas Sands Corp. (NYSE: LVS) may have shown that Macau was still a drag on earnings, but the casino-hotel operator managed to beat its earnings expectations after cost measurement in Macau and in Marina Bay Sands in Singapore.
Sheldon Adelson’s casino giant announced that its board of directors approved an increase of almost 11% in the company’s recurring common stock dividend for 2016 to $2.88 per Share. This is a $0.72 per quarter payout versus $0.65 currently, which will lift that dividend yield to 6.1% for 2016 from the 5.55% yield in 2015 based on the current share price of $46.84. For whatever it is worth, this new higher payout is now currently higher than the consensus EPS estimates for 2015 and 2016.
ONEOK Inc. (NYSE: OKE) announced an increase to ONEOK’s quarterly dividend by 1 cent per share, a 2% hike, to $0.615 per share for the third quarter 2015. This new annualized payout of $2.46 per share generates a yield of almost 6.6%. The general partner of ONEOK Partners said that it is committed to delivering long-term value as it did with a recent $650 million equity investment in the partnership that is expected to result in increased distributions to ONEOK.
ONEOK said that since becoming the pure-play general partner of ONEOK Partners in February 2014, it has increased its dividend five times for a total of a 54% increase during that period.
Seagate Technology PLC (NASDAQ: STX) may have recently disappointed investors with its guidance, and a rival merger might put pressure as well, but the storage giant reported on Wednesday that its board of directors has approved a 17% increase in the targeted regular cash dividend. With an earnings warning, most companies might be more reluctant to hike their payout.
Seagate’s targeted annual dividend will rise to $2.52 from $2.16 per share. Its new quarterly rate of $0.63 per share will be paid on November 20, 2015. Seagate shares were down 3.6% at $37.13 on Wednesday, versus a 52-week range of $36.80 (from Wednesday) to $69.40. Its consensus analyst price target is closer to $46.75, but this was just a $49.00 stock just a week earlier.
Visa Inc. (NYSE: V) issued a statement for its 2016 annual meeting, and decided to throw in a dividend hike announcement along with that. Some companies do not seem to know how show emphasis, but they usually learn through time. The big announcement was that its board of directors had declared a quarterly cash dividend of $0.14 per share, higher than the $0.12 per share dividend before.
This was for all classes of its common stock payable on December 1 to holders of record as of November 13. What matters here is that Visa, a Dow Jones Industrial Average component, had a paltry yield of only about 0.64%. This moves the dividend up to a yield of 0.75%.
While still an embarrassing yield for a Dow stock, it continues to be a move in the right direction. Visa still pays out only about 20% of its operating earnings per share if you use a 2015 and 2016 blended EPS target.
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