Last week was one of those periods income investors love. By my count, over 20 companies lifted their dividends. The largest sectors of the economy were well-represented by the raisers, and more than one famous stock market name added to its distribution.
In thick-and-fast times like these, it can be hard to pick just a few stocks to feature in this digest. But pick I must, so:
General Motors (GM 0.20%)
This king of automakers once had an unassailable reputation as a reliable dividend payer. That crashed like a bad accident during the financial crisis, when the company's finances were so bad that it had to be bailed out with government funds.
General Motors is obviously keen on bringing back its former renown. It declared the first quarterly dividend raise in its post-crisis history, lifting the payout a nice 20% to $0.36 per share.
This is on the back of a strong run (sorry, ride) for the company over the past few months. The December sales volume leaped ahead by nearly 19% on a year-over-year basis, helping the company trounce analyst estimates for its Q4 bottom line.
GM Net Income (Quarterly) data by YCharts
Lower gas prices are playing a big role in GM's recent success; they've cranked up demand for big vehicles like SUVs and full-size pickups. The firm is very strong in those categories, and has benefited commensurately.
For 2015, the car maker is expecting improved profitability in all of its regions. Those gas prices should help (assuming they linger), as well as global factors such as the closing of a huge plant in Germany, healthy demand in China, and notable recent improvements in South American markets.
GM's doing well, and I think its projections of improved bottom line are on the mark. I wouldn't be too worried about the sustainability of this new dividend.
GM's new dividend is to be paid on June 23 to shareholders of record as of June 10. The company will announce its Q1 results on Thursday.
CSX (CSX -0.04%)
The reduced costs of oil derivatives are also fueling the results of this company, which has raised its quarterly payout by 13% to $0.18 per share.
Actually, cheaper fuel was basically the reason for CSX's 11% year-over-year rise in net profit (to $442 million) for Q1. Revenue was basically flat at just over $3.0 billion, as was arguably the most important set of metrics for CSX (and any railroad hauler) -- shipment volumes.
In terms of both units shipped and revenue, none of the firm's three product categories recorded much, if any, growth during the quarter.
So those fuel cost savings swooped in and saved the day on the bottom line, in combination with slightly better efficiencies in the company's operations.
CSX is hardly an outlier in its segment. Recent results from rival rail haulers are similarly uninspiring; share prices overall have generally been down so far this year.
For CSX, it doesn't look like the good times will come roaring back in the proximate future. It has cut forward guidance for full-year 2015; it now believes that year-over-year EPS growth will come in at the mid to high single digits, down from the original projection of a double-digit increase.
Meanwhile, glancing at CSX's financials, its dividend payouts have exceeded its free cash flow numbers for three of the past five quarters. Despite the firm's strong record of improving its payout over the years, I'd be a bit nervous about the sustainability of this new one.
CSX's upcoming distribution is to be handed out on June 15 to shareholders of record as of May 29.
Kinder Morgan (KMI -0.85%)
Speaking of fossil fuels, this company deeply involved in those commodities just lifted its quarterly distribution by 7% to $0.48 per share.
In its Q1, Kinder Morgan took a hit to revenue (down by 11% on a year-over-year basis to $3.6 billion) largely due to what its CEO termed "a rough commodity pricing environment."
A more important metric for Kinder Morgan is distributable cash flow, from which it keeps its dividends flowing. Due largely to the consolidation of several onetime subsidiaries under the firm's wing, DCF grew by 5% on a year-over-year basis to land at $0.58 per share.
This more than covers the new dividend, and provides room for the firm to eventually hit its goal of $2.00 per share for the entirety of 2015.
KMI Dividend data by YCharts
Meanwhile, Kinder Morgan is adding capacity through recent acquisitions, most notably a $3 billion deal it closed in Feburary for midstream operator Hiland Partners.
I feel that the company is managing its finances well in regards to DCF, since the latest figure more than covers the new distribution and then some. I also find Kinder Morgan's concentrated efforts to grow its business encouraging, and I think they bode well for growth in the future.
The firm's upcoming payout will be dispensed on May 15 to shareholders of record as of April 30.
