Last week, much like a great many of us, the market turned its attention to preparing for Christmas. With presents to wrap and holiday turkey to carve, it seems there wasn't much time or inclination for stocks to raise their dividends.
But, as always seemed to happen in 2015, there were a few hardy companies that chose the week to hike their payouts. Like Santa's reindeer, they delivered for the holiday. Who were these hardy souls? Read on to find out.
8point3 Energy Partners
If you can say one thing for this renewable energy yieldco, it's that it keeps its promises. 8point3 Energy Partners (CAFD +0.00%) has delivered on a pledge it made several months ago to increase its distribution by 3.5%, to nearly $0.22 per unit.
The timing of the increase is auspicious. It came mere days after Congress, in an attachment to the massive 2016 budget bill, agreed to an extension to the investment tax credit for new wind and solar energy projects.
That's going to give a big boost to the renewables industry. According to data from Bloomberg New Energy Finance, cited by 24/7 Wall Street, spending between 2017 (the first year the extension kicks in) and 2021 should total around $50 billion. Without the extension, that figure would have been $29 billion.
8point3 Energy Partners was already doing well before the good news hit. In Q3, it booked a profit of nearly $1.3 million on $3.1 million in revenue, amassing $6.7 million in cash available for distribution. It's also done an impressive job of getting its asset base up and operational rather quickly, considering that it only went public this past June.
CAFD Total Assets (Quarterly) data by YCharts.
Given the above, I'd say the new distribution is relatively safe for now. But potential investors should bear in mind that, in spite of the looming renewal of the tax credit, the shape and future of the renewables segment can be hard to predict. So perhaps income investors should approach this stock with some caution.
8point3 Energy Partners' new distribution is to be handed out on Jan. 14 to unitholders of record as of Jan. 4.
Hanmi Financial
Banks that cater to a particular ethnic group have a long, if unheralded, history in American finance. For instance, before Bank of America grew into the behemoth it is today, it specialized in a particular group of European origin in its early days when it was known as the Bank of Italy.
The ethnic banking segment is still active. Korean-American lender Hanmi Financial (HAFC +0.93%), for one, is performing decently enough to hike its payout by a meaty 27% to $0.14 per share.
It might have foregone that increase had it been successful in its attempted buyout of fellow Korean-American lender BBCN. Last month, it offered $1.6 billion in an unsolicited bid for its peer, which fell by the wayside when BBCN announced its own acquisition, of yet another Korean-American banking group, Wilshire Bancorp. Hanmi Financial subsequently abandoned its pursuit.
So investors hoping for an enlarged Hanmi Financial will have to wait. In the meantime, the company is doing well, if not spectacularly. It's managed to grow its net interest income and, especially, its assets since last decade's financial crisis.
HAFC Total Assets (Annual) data by YCharts.
While doing so it has posted healthy, if erratic, profits. It's a company that seems to know its specialty client base quite well and how to profit from it. Assuming it doesn't go hunting anytime soon for another asset, I'd say the new dividend is fairly secure.
Hanmi Financial's upcoming payout will be dispensed on Jan. 15 to stockholders of record as of Dec. 31.
Felcor Lodging Trust
Is Felcor Lodging Trust's (NYSE: FCH) quarterly dividend back to stay? That's a legitimate question to ask, as the luxury hotel real estate investment trust suspended it in the thick of the financial crisis, back in the dark days of 2008.
Since reinstating the payout in early 2014, the company has raised it twice. Last week's increase -- no. 2 -- was a cool 50%, to $0.06 per share.
That optimism is justified in certain respects. Felcor is still struggling to make a profit, but in Q3 it managed to squeeze higher revenue from the 39 properties it's held for at least a year -- by 7% on a year-over-year basis to nearly $213 million. And funds from operations (a key measure of viability for REITs) climbed by 19% to $0.25 per share across that time span.
The REIT has been on a long, slow diet over the past decade. During that time, it's shed assets in smaller markets (like the Holiday Inn at Toronto's airport) in favor of prestige properties in big locales such as the tony Knickerbocker Hotel in New York City.
FCH Net Income (Annual) data by YCharts.
But since the company is not yet consistently profitable, it's still on the hook to prove that this strategic shift can land consistently in the black over the long term. That's an open question, so while I think Felcor can at least sustain the current dividend for at least a bit, I'm not sure I'd bank on it too far into the future.
Felcor's new distribution will be paid on Jan. 29 to shareholders of record as of Jan. 15.
