Some Dividend Increases During Earnings Season (MSFT, OHI, O, GLW, WHG, KMP)
Jim Trippon: Nestled in among the earnings reports, sometimes along with them, are announcements of dividend increases. As weâ€™ve written about consistently, this has been a year where dividend increases have consistently appeared, as many companies continue to reward shareholders. The last few weeks were no different, with several companies announcing dividend hikes.This has been the subplot of the earnings season, where dividend news has been strongly overshadowed by some earnings reports that missed analyst estimates and have caused the market to take at least a pause, if not a hard look at things. Still, many companies make their annual dividend increases in the fall, so this can be a busy time for dividend investors who watch these stocks.
Microsoft Five Year Chart
Source: Yahoo Finance
A Couple Of REIT Increases
Many investors probably havenâ€™t heard of Omega Healthcare (NYSE:OHI), which is a healthcare REIT. The company recently raised its quarterly dividend to $0.44, a nearly 5 percent increase. The yield on Omega Healthcare with the new dividend payment is now 7.5 percent. Many of the healthcare REITs, which are required just as regular REITs are, to pass through roughly 90 percent of their income to investors, pay high yields.
Omega Healthcare Five Year Chart
Source: Yahoo Finance
A Financial Stock And A Glass Stock
Westwood Holdings Group (NYSE:WHG) is probably another stock that many investors havenâ€™t followed. This is an asset management company whose dividend yields 4.2 percent. Westwood increased its quarterly dividend from 37 cents to 40 cents, and on occasion has paid out special dividends. Although asset management is a growing industry, the company has a high dividend payout ratio, roughly 80 percent, so it will need to have strong earnings growth to pull that figure down to a more reasonable level.
Most times the market responds positively to news of a stockâ€™s dividend increase, though this isnâ€™t always the case. Corning (NYSE:GLW), whose earnings report was greeted with a mixture of indifference and concern over a potentially softer economy for its products, such as Gorilla Glass and other display panel technology, raised its dividend by 9 cents. The dividend increase was 20 percent so the stock now yields 2.7 percent. Revenue was down a bit and earnings were essentially flat, but the diversified glass products maker has not only raised its dividend but has a share buyback program as well.
An Energy Play
Kinder Morgan Energy Partners (NYSE:KMP), a master limited partnership, is an energy pipeline and storage company. Kinder Morgan has been one of the most successful energy MLPs, and generates significant cash flow which fund its strong distributions. It currently yields 5.9 percent after it recently increased its quarterly distribution for the 16th consecutive year. Kinder Morgan operates 180 storage terminals, has more than 75,000 miles of pipeline assets, while it continues new strategic investments and acquisitions. As a pipeline transportation company, Kinder Morgan operates as a toll business, so its fees arenâ€™t as volatile as fluctuating commodity prices. This is a historically strong MLP.
Kinder Morgan Five Year Chart
Source: Yahoo Finance
Jim Trippon, founder ofÂ Trippon Financial Media, Inc., is a maverick that has dedicated his investment career to helping investors make smarterÂ financialÂ and stock selection decisions. Trippon,Â an internationally recognized expert on global andÂ valueÂ investing, has a deep passion for finding hidden value in globalÂ equityÂ markets. Trippon started his career as aÂ financialÂ statement examiner with Price Waterhouse which allows him to dissect a public companyâ€™s financialÂ picture and better identify hidden gems. Tripponâ€™s savvy approach toÂ investingÂ and personalÂ financeÂ makes him in high demand by major media who seek his unique perspective on stocks and global economics. He hasÂ been featured in top publications both in the US and abroad includingÂ Bloomberg, Investorâ€™sÂ BusinessÂ Daily, The New York Times, The International Herald Tribune,Â StockÂ FuturesÂ and Options Magazine, The Bull and Bear Financial Report and he regularly appears on broadcast television including as an on air contributor to CNBC, CNN, Fox Business, and Fox News.
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