General Electric Company (GE) operates as a technology, media, and financial services company worldwide. Back in 2009, General Electric (GE) cut dividends by 68% to 10 cents/share. Investors, who just a few months earlier were reassured by the company’s CEO that the dividend is safe, rushed to the exits, sending the stock price to its lowest levels in a decade. The company halted its stock buyback program, and issued shares to the public. Legendary Investor Warren Buffett also made an investment in the conglomerate, by putting several billion in exchange for preferred stock yielding 10%. Almost one and half years after the dividend was cut, the company raised its quarterly dividend 20% to 12 cents/share on Friday. The news sent the stock over 3% higher for the day. Whether the company can rebuild its streak of consecutive dividend increases remains to be seen however.
“We are able to restore the GE dividend at a historical payout level for 2010 earlier than previously anticipated and to extend our share buyback program because of continued strong cash generation, recovery at GE Capital, and solid underlying performance in our Industrial businesses through the first half of 2010,” GE CEO Jeff Immelt said. “In addition, the Company continues to plan on capitalizing on strategic and financially attractive inorganic growth opportunities. “
“We are executing well, progressing on our plans to make GE Capital a smaller, more competitive specialty-finance company, and continuing to generate strong cash flow,” Immelt said. “This gives us the flexibility to allocate capital for growth and shareholder value, while keeping GE safe and secure.”
Other companies which are seldom mentioned, but should probably get much more credit include energy master limited partnerships, which boast strong cash flows and stable distributions. In addition to that, the toll-bridge business model for those energy transportation companies has enabled many of them to raised distributions more than once per year.
Enbridge Energy Partners, L.P. (EEP) owns and operates crude oil and liquid petroleum transportation and storage assets, as well as natural gas gathering, treating, processing, transmission, and marketing assets in the United States. The company announced a cash distribution of $1.0275 per unit, which was an increase of 2.5 percent over previous quarters distribution per unit. Yield: 7.10%
Navios Maritime Partners L.P. (NMM) operates as an international owner and operator of drybulk carriers in Greece. Navios Maritime Partners L.P. increased cash distributions by 1.20% to $0.42 per unit and has consistently raised distributions since going public in 2008. Yield: 9.20%
Western Gas Partners, LP (WES) owns, operates, acquires, and develops midstream energy assets in east and west Texas, the Rocky Mountains, and the Mid-Continent. This master limited partnership raised quarterly distributions by 3% to 35 cents/unit and has consistently raised distributions since going public in 2008. Yield: 5.70%
El Paso Pipeline Partners, L.P. (EPB) engages in the ownership and operation of natural gas transportation pipelines and storage assets in the United States. declared a $0.40 per unit quarterly cash distribution for the second quarter of 2010, or $1.60 per unit on an annualized basis. This distribution represents a 21% increase from the $0.33 per unit paid for the second quarter 2009 and a 5% increase from the $0.38 per unit paid for the first quarter 2010. El Paso Pipeline Partners, L.P. has raised distributions every quarter since going public in 2008. Yield: 5.10%
Vanguard Natural Resources, LLC, (VNR) through its subsidiaries, engages in the acquisition and development of natural gas and oil properties in the United States. The company raised quarterly distributions by 4.80% to 55 cents/unit. Vanguard Natural Resources, LLC has consistently raised distributions since going public in 2008. Yield: 8.90%
Spectra Energy Partners, LP, (SEP) through its subsidiaries, engages in the transportation of natural gas through interstate pipeline systems, and the storage of natural gas in underground facilities in the United States. This master limited partnership raised quarterly distributions by 2.40% to 43 cents/unit. Spectra Energy Partners, LP has raised distributions every quarter since going public in 2007. Yield: 4.90%
Other companies raising dividend include:
Starbucks Corporation (SBUX) engages in the purchase, roasting, and sale of whole bean coffees worldwide. The company increased quarterly dividend 30% to 13 cent/share. This was the first dividend increase since the company started paying dividends earlier this year. Yield: 2.10%
Westfield Financial, Inc. (WFD) operates as the bank holding company for Westfield Bank that provides various banking products and services to businesses and individuals in Massachusetts. The company raised dividends by 20% to $0.06 per share. This company has not only consistently raised distributions since 2003, but also frequently pays special dividends to shareholders. Yield: 2.80%
Eaton Corporation (ETN) operates as a power management company primarily in the United States, Canada, Latin America, Europe, and the Asia Pacific. The company also increased their quarterly dividend 16% to 58 cents/share. This was the first dividend increase since 2008. Yield: 3%
Solera Holdings, Inc. (SLH) provides software and services to the automobile insurance claims processing industry. The company’s board of directors approved a 20% increase in its quarterly dividend to 7.50 cents/share. This was the first dividend increase since the company started paying dividends in 2009. Yield: 0.80%
Digital Realty Trust, Inc. (DLR), a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. The company increased quarterly dividends by 10.30% to 53 cents/share. The company has consistently raised distributions since 2004. Yield: 3.50%
Lindsay Corporation (LNN) designs, manufactures, and sells automated agricultural irrigation systems that are primarily used in the agricultural industry to increase or stabilize crop production while conserving water, energy, and labor in the United States and internationally. The board of directors declared a six percent increase in its regular quarterly cash dividend to $0.085/share. The company has consistently raised distributions since 2003. Yield: 1%
Altera Corporation (ALTR) designs, manufactures, and markets programmable logic devices (PLD), HardCopy application-specific integrated circuit (ASIC) devices, pre-defined design building blocks, and associated development tools. The company raised quarterly dividends by 20% to 6 cents/share. The company doesn’t have a long history of dividend increases. Yield: 0.80%
Airgas, Inc., (ARG) through its subsidiaries, distributes industrial, medical, and specialty gases, as well as hardgoods in the United States. The company raised quarterly dividends from 22 to 25 cents/share. The company has consistently raised distributions since 2003. Yield: 1.50%
A. O. Smith Corporation (AOS) engages in the manufacture and sale of water heating equipment and electric motors for the residential, commercial, and industrial end markets in the United States and internationally. The Board of Directors approved an 8% increase in the company's quarterly cash dividend to a rate of $0.21/share. This dividend achiever has raised distributions for 17 consecutive years.Yield: 1.50%
On a side note, investors who find Enbridge Energy Partners, L.P. (EEP) to be attractively valued at the moment, but are not willing to deal with further complications in their tax returns, could consider purchasing Enbridge Energy Management, L.L.C. (EEQ) shares instead. Enbridge Energy Management, L.L.C. does not pay distributions in cash, but automatically distributes fractional shares to shareholders on record. They pay their distributions directly as additional shares, which is similar to automatic dividend reinvestment. If you choose to invest in Kinder Morgan Energy (KMP) or Enbridge Energy Partners (EEP) in an IRA, consider investing in Kinder Morgan Management (KMR) and Enbridge Energy Management, L.L.C. (EEQ). KMR and EEQ are great vehicles for taxable accounts as well since their distributions are not taxable when received, and thus shareholders are not issued an annual 1099 tax form. You would pay taxes only when you sell your units.The taxation characteristics of your investments are just one part of the investment puzzle. Always make sure to investigate the company’s fundamentals and do your homework before investing in stocks.
Full Disclosure: Long EEQ and KMR
- MLPs for tax-deferred accounts
- General Electric (GE) Cuts the Dividend
- Master Limited Partnerships (MLPs) – an island of opportunity for dividend investors
- Is GE’s dividend safe?
One of my favorite books on investing is “ The Snowball: Warren Buffett and the Business of Life ” by Alice Schroeder. The book describes ho...
I view each investment I make as a seed that I plant for the long-term. Some seeds could turn into a tree that would provide fruit (dividen...
In my previous article, I discussed the concept of the dividend snowball as it applies to my dividend portfolio and dividend income. The po...
In a previous article, I discussed that I will reach Financial Independence some time in 2018 . After I reach the dividend crossover point ,...
One of my largest holdings is McDonald’s (MCD). The company recently raised its quarterly dividend by 4.7% to 89 cents/share. McDonald's...
In a previous article titled, My Dividend Retirement Plan , I outlined the concept of the dividend crossover point. This happens when your d...
One of the biggest mistakes I ever made was not maxing out my 401 (k), IRA and HSA accounts between 2007 and 2012. As a result, I ended up ...
The more I learn and experience about investing, the more convinced I become that doing nothing is the best strategy for long-term success i...
I started my site dedicated to dividend investing in January 2008 . I had been able to accumulate some money for the first time in 2007, and...
I expect that this year, I will be able to cover something like 60 - 80% of my targeted annual expenses from dividends alone. This means tha...