3 Energy Companies Open Their Wallets Wider to Shareholdershttp://www.fool.com/investing/general/2013/04/26/3-energy-companies-open-their-wallets-wider-to-sha.aspx Matt DiLallo
April 26, 2013
There is no shortage of research that points to the fact that companies that pay a dividend outperform non-payers. That same research will point out that those companies that can grow their payout are even more likely to outperform. With that as a backdrop, let's take a look at three energy companies that recently opened up their wallets.
Serving oilfields yields great returns
The dividend boost is just part of the story here, as Halliburton began a systematic share repurchase program under its authorized $1.7 billion buyback plan. Along with earnings, the company reported that it had already bought back 1.2 million shares for $50 million. Since it started buying back shares in 2006, Halliburton has returned $3.3 billion to shareholders by repurchasing 97 million shares.
Despite on-going Macondo litigation from the BP oil spill, the company has a rock solid balance sheet. Halliburton's confidence in maintaining this dividend policy is buoyed by peer-leading results, and expectations of continued growth both in North America and internationally. If you take look at these two together, Halliburton has a long runway of future outperformance ahead of it.
Keeping it in the family
Don't expect these pay raises to stop anytime soon. Kinder Morgan Partners has an organic growth pipeline of more than $12 billion in projects to keep it busy over the next five years, while El Paso has a number of drop-down opportunities from Kinder Morgan, as well as the potential to participate in the LNG export market. As these projects come online, they'll drive further distribution growth across the family.