Last week was a short one due to the Independence Day break, and perhaps as a result there weren't too many dividend increases from companies on the market. But what they lacked in volume they made up for in magnitude.
Let's take a look at a large-cap oil and gas concern, another a power company of long standing, and a regional bank that's about to start returning more money to its shareholders.
BreitBurn Energy Partners
A well-diversified energy firm, BreitBurn Energy Partners (NASDAQOTH:BBEPQ) has assets in a clutch of plays across the U.S., including the hot Permian Basin in Texas and New Mexico.
Lately, BreitBurn Energy Partners has favored growth through acquisitions, most notably inking a huge deal worth around $846 million to acquire a set of Oklahoma assets from a subsidiary of Whiting Petroleum (NYSE:WLL) last summer.It still has its wallet open, as management has set a target of $600 million in new buys for this year.
That's yet to materialize, which could be a relief for income investors worried that such outlays put the dividend at risk.
That concern might be justified. BreitBurn Energy Partners is a serial dividend-payer, and it's shelling out often: Since the beginning of this year, it has handed out its distribution on a monthly basis. Meanwhile, its capital expenditures are high, and it's been free-cash-flow negative lately.
Regardless, BreitBurn just lifted its dividend slightly, bumping it by 1% to $0.1675 per unit for a chunky yield of 9%. The upcoming monthly payout will be dispensed on July 16 to unit holders of record as of July 11.
Due to the steady and generally predictable nature of its business, the utilities sector can be a fine source of steady income.
Exhibit A is North Carolina-seated Duke Energy (NYSE:DUK), a traditional power company doing business in six states on or near the eastern seaboard. To broaden these offerings, the company also operates renewable-energy sources and draws revenue from non-U.S. operations located chiefly in Latin America.
That wide customer base has helped Duke Energy improve its results notably so far this decade -- the company has grown its revenues and net profit every fiscal year since 2009.
This gives the company plenty of scope to increase its quarterly distribution, which it's done once per year like clockwork starting in 2007 (adjusted for a 1-for-3 reverse split effected in 2012). At the end of its most recently reported quarter, Duke Energy had over $1.5 billion in cash and strong operating cash flow, making it rather likely that it'll stick to this habit.
Last week Duke Energy stayed true to form and raised its payout by 2% to $0.795 per share, which yields 4.4% at the current share price. The dividend is to be paid on September 16 to shareholders of record as of August 15.
Bank of the Ozarks
On the subject of good dividend raise track records, Bank of the Ozarks (NASDAQ:OZK) has been adding to its distribution for 16 straight quarters (when adjusted for a stock split effected in June). OK, those increases have been of the $0.01 or $0.02 variety, but that's still a pretty good streak.
That steady growth from the regional lender has been matched by similar gains in total assets, specifically net loans, and more specifically mortgages. All three line items have risen admirably over the past few years, with total assets climbing from $2.8 billion in 2009, to $3.8 billion two years later, to $4.8 billion in 2013.
Meanwhile, the bank lands well and consistently in the black, and its total dividend payout is typically much lower than its operating cash flow, so its distribution looks secure at the moment.
Bank of the Ozarks' most recently declared dividend is $0.12 per share. This is $0.01, or 4%, higher than the preceding payout (again, adjusted for that recent stock split), and yields 1.4% on the share price. The distribution will be paid on July 18 to shareholders of record as of July 11.