First-quarter-earnings releases are well under way, and with them come announcements about dividend increases. In today's low-interest environment, investors are continuously seeking out stocks that give back. With that in mind, today I'll look at three strong companies that just announced they are boosting quarterly payouts.
1. Kinder Morgan (NYSE: KMI ) and Kinder Morgan Energy Partners (NYSE: KMP )
The Kinder Morgan family got off to a great start in the first quarter of 2013, and all its entities were able to increase their dividends. KMI bumped its quarterly payout 19% year over year to $0.38 per share and $1.52 annualized.
Management intends to continue to increase dividends as the year progresses so that the final realized annual payout is $1.57. KMP increased its distribution to $1.30 per unit, or $5.20 annualized. It is an increase of 8% over 2012's first-quarter payout.
2. Enterprise Products Partners (NYSE: EPD )
Enterprise recently announced it will increase its distribution for the 35th straight quarter. The partnership will pay out $0.67 per unit, which is $2.68 on an annualized basis. It is a 6.8% increase year over year.
Enterprise has a distribution reinvestment program that allows unit holders to receive a 5% discount on additional units. It is an excellent benefit given Enterprise's history of distribution increases and 102% growth in its unit price over the past five years.
Enterprise Products Partners, with its superior integrated asset base, can profit from the massive bottlenecks in takeaway capacity by taking on large-scale projects. To help investors decide whether Enterprise Products Partners is a buy or a sell today, click here now to check out The Motley Fool's brand-new premium research report on the company.
3. Plains All American Pipeline (NYSE: PAA )
Plains All American is bumping its distribution up 10% compared to a year ago. Its quarterly distribution will rise to $0.575 per unit, or $2.30 on an annualized basis. The partnership has increased its payout for 15 straight quarters, and 34 of the last 36 quarters.
Plains' distribution has a compound annual growth rate of 7.7%, and management is targeting 9%-10% distribution growth for 2013. So far, it is right on track.
More info on MLPs
With the exception of Kinder Morgan, all of the stocks listed above are structured as master limited partnerships. This business structure mandates high payouts to investors, but that's not all you need to know before you buy in. The Fool has some great resources for investors looking to broaden their portfolio to include these high-yielding investments.
Suggestions for future reading:
- An Investor's Guide to MLPs
- The Hidden Cost of MLP ETFs
- MLPs and IRAs
- Exploring 3 Different MLP Structures
- MLPs and Incentive Distribution Rights