Monday, October 18, 2010

Six Notable Dividend Growth Stocks in the News

Every week, a growing number of companies raise distributions. Up until now I tended to include in my review all companies raising distributions for the given week. In order to be more efficient however, I am going to concentrate in my weekly reviews from now on, only on companies which have raised distributions for over five years in a row. This should eliminate focusing on companies which have not raised distributions for a sufficiently long period of time. If a company keeps growing distributions for at least five years, it would definitely be included and reviewed accordingly. If a company has raised distributions for at least a decade, it would be included in my list for further research and possible accumulation on dips.

The most notable companies which raised distributions last week include:

Enterprise Products Partners L.P. (EPD) provides a range of services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products, and petrochemicals in the continental United States, Canada, and Gulf of Mexico. The company raised its quarterly distributions by 1.30% to 58.25 cents/unit. This master limited partnership is a member of the dividend achievers index and has raised distributions for eleven consecutive years. Yield: 5.60%

Enterprise GP Holdings L.P. (EPE), which is the general partner behind Enterprise Products Partners L.P. (EPD) and Energy Transfer Equity L.P. (ETE), also announced an increase in its quarterly distributions. The company raised distributions by 2.70% to 57.50 cents/unit. This master limited partnership has consistently raised distributions every quarter since 2005. Yield: 3.70%

Reynolds American Inc. (RAI), through its subsidiaries, manufactures and sells cigarette and other tobacco products in the United States. The company’s board of directors approved an 8.9% dividend increase from 45 to 49 cents/share. Reynolds American has consistently raised distributions since 2005. Yield: 3.20%

Healthcare Services Group, Inc. (HCSG), through its subsidiaries, provides housekeeping, laundry, linen, facility maintenance, and food services to nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. The company raised its quarterly dividend from 23 cents/share to 23.25 cents/share. It has raised dividends every single quarter since 2003. Yield: 3.80%

Genesis Energy, L.P. (GEL), together with its subsidiaries, operates in the midstream segment of the oil and gas industry in the Gulf Coast area of the United States. The company announced a 3.30% increase in its quarterly distribution to 38.75 cents/unit. This master limited partnership has raised distributions since 2004. Yield: 6.20%

Omega Healthcare Investors, Inc. (OHI) operates as a real estate investment trust (REIT) in the United States. The company raised its quarterly distributions by one penny to 37 cents/share. This REIT has consistently raised dividends since 2004. Yield: 6.40%

Most of the companies listed above seem like they have the business model that would allow them to raise distributions over the next few years. I would place Enterprise Products Partners L.P. (EPD) on my list for further research, given the length of its dividend history and the fact that it is one of premier master limited partnerships in he US.

Full Disclosure: None

Relevant Articles:

- The ten year dividend growth requirement
- Four High Yield REITs for current income
- Master Limited Partnerships (MLPs) – an island of opportunity for dividend investors
- Why Dividend Growth Stocks Rock?

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