Monday, July 13, 2015

Six Confident Dividend Stocks Giving Shareholders a Raise

I love it when the stock market goes on sale, like it has been so far in the past two - three weeks. For aspiring dividend growth investors, this means that we are purchasing future income at discounted prices. When I acquire ownership stakes at discounted prices in quality companies like the ones I discussed last week, I get closer and closer to my goal of reaching my dividend crossover point sooner.

I also like it when companies I purchased long time ago keep rewarding me with a higher dividend payment, year after year. It is amazing that just because I have had the foresight to identify and purchase a quality dividend growth stock, I end up receiving a passive income stream, which grows above the rate of inflation.

In the past week, there were several companies that hiked dividends to their loyal shareholders. I isolated several of those which had raised distributions for at least five years in a row to present here:



Walgreens Boots Alliance, Inc. (WBA), together with its subsidiaries, operates a network of drugstores in the United States and Internationally. The company raised its quarterly dividend by 6.70% to 36 cents/share. Walgreens Boots Alliance has been raising its dividends for 40 years in a row, making it a dividend champion. The ten year dividend growth rate is 21.20%/year. Currently, the stock is selling at 24.70 times forward earnings and yields 1.55%. Check my analysis of Walgreens for more details on the company. I last added to my position in Walgreens in 2014. This is one of my largest positions, plus the stock is richly valued at the moment. As a result, I do not plan on adding any shares there.

Enterprise Products Partners L.P. (EPD) is a master limited partnership which provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products in the United States and internationally. The partnership raised its quarterly distribution to 38 cents/unit. This was an increase of 5.60% over the distribution paid at the same time last year. This master limited partnership has been raising its distributions for 18 years in a row, making it a dividend achiever. The ten year distribution growth rate is 6.60%/year. Currently, this MLP yields 5%. I actually sold all my units in Enterprise Products Partners in 2013, and do not initiate a position because I have ownership in four other pipeline companies already.

Paychex, Inc. (PAYX) provides payroll, human resource, insurance, and benefits outsourcing solutions for small to medium-sized businesses in the United States and Germany. The company raised its quarterly dividend by 10.50% to 42 cents/share. As a result of this increase, the annual dividend payment is set for a fifth straight year of annual increases. The company had previously raised dividends for 2 decades in a row, before freezing them during the financial crisis. The stock is selling for 23.80 times forward earnings and yields 3.50%. While I like the company, I never liked the high dividend payout ratio and now I do not like the high valuation.

Duke Energy Corporation (DUK), together with its subsidiaries, operates as an energy company in the United States and Latin America. It operates through three segments: Regulated Utilities, International Energy, and Commercial Power. The company raised its quarterly dividend by 3.80% to 82.50 cents/share. Duke Energy has been raising its dividends for 11 years in a row, making it a dividend achiever. The ten year dividend growth rate is 5.10%/year. Currently, the stock is selling at 15.90 times forward earnings and yields 4.40%. This is a company I have not really had on my radar, so I need to put it on my list for further research.

Genesis Energy, L.P. (GEL) is a master limited partnership which operates in the midstream segment of the oil and gas industry in the Gulf Coast region of the United States. The partnership raised its quarterly distribution to 62.50 cents/unit. This was an increase of 10.60% over the distribution paid at the same time last year. This master limited partnership has been raising its distributions for 12 years in a row, making it a dividend achiever. The ten year distribution growth rate is 14%/year. Currently, this MLP yields 5.70%. As I mentioned above, I already have too much exposure to pipelines. However, it pays to familiarize myself with as many businesses as possible, in order to be able to act quickly if the right opportunity arises.

Plains All American Pipeline, L.P. (PAA), is a master limited partnership which engages in the transportation, storage, terminalling, and marketing of crude oil, natural gas liquids (NGL), natural gas, and refined products in the United States and Canada. The partnership raised its quarterly distribution to 69.50 cents/unit. This was an increase of 7.80% over the distribution paid at the same time last year. This master limited partnership has been raising its distributions for 14 years in a row, making it a dividend achiever. The ten year distribution growth rate is 8.30%/year. Currently, this MLP yields 6.40%. As I mentioned above, I already have too much exposure to pipelines. However, it pays to familiarize myself with as many businesses as possible, in order to be able to act quickly if the right opportunity arises.

Full Disclosure: Long WBA



Relevant Articles:

Your Retirement Income is on Sale!
Dividend Companies I am Considering this Month
How to read my weekly dividend increase reports
Why did I sell Enterprise Product Partners (EPD)
Dividend Investors Should Ignore Price Fluctuations

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