During the past week, GuruFocus recognized two companies as dividend growers. In order to be qualified for this list, the company had to:
· Have a dividend yield of greater than 3%.
· Have a strong history of stable and increasing dividends.
· Maintain Guru ownership.
· Have a market cap of greater than $10 billion.
The following two companies come from various industries and sectors of the market, but they all fit the necessary criteria needed to qualify them as dividend growers.
A comparison of the companies’ historical dividend growth:
Spectra Energy (SE)
On Jan. 6, Spectra Energy declared a dividend of $0.335 per share, representing 3.50% dividend yield for the company. This dividend is payable on Mar. 10 to shareholders of the record at the close of business on Feb. 14, 2014.
The company’s historical dividend growth is as follows:
· 10-year: 0.00%
· 5-year: 4.20%
· 3-year: 4.60%
Spectra Energy, through its subsidiaries and equity affiliates, owns and operates a portfolio of complementary natural gas-related energy assets and is one of North America's natural gas infrastructure companies.
Spectra Energy’s historical revenue and net income:
The analysis on Spectra reports that the company’s operating margin is expanding, its price is near a 10-year high and its dividend yield is near a 5-year low. The analysis also notes that the company has issued $4.9 billion of debt over the past three years.
The top guru shareholders of Spectra Energy stock are Pioneer Investments (Trades, Portfolio) who hold 593,127 shares and Mario Gabelli (Trades, Portfolio) who holds 130,259 shares. Â
This dividend represents a 9.8% increase from the company’s last distribution. This distribution jumped up $0.12 per share setting the company’s new annual dividend to $1.34 per share.
Spectra Energy also recently noted a handful of executive management changes within the company. These changes come from Alan Harris, the chief development and operations officer, and John Arensdor, the chief communications officer, when they announced that they would be retiring in 2014.
The Peter Lynch Chart suggests that the company is currently overvalued:
Spectra Energy has a market cap of $23.28 billion. Its shares are currently trading at around $34.74 with a P/E ratio of 22.80, a P/S ratio of 4.40 and a P/B ratio of 2.60. The company had an annual average earnings growth of 4.30% over the past ten years.
Plains All American Pipeline (PAA)
On Jan. 9, Plains All American Pipeline LP declared a dividend of $0.615 per share, representing a 4.60% dividend yield for the company. This dividend is payable on Feb. 14 to shareholders of the record at the close of business on Jan. 31, 2014.
The company’s historical dividend growth is as follows:
· 10-year: 7.70%
· 5-year: 4.60%
· 3-year: 5.20%
Plains All American Pipeline is engaged in the transportation, storage, terminalling and marketing of crude oil and refined products, as well as in the processing, transportation, fractionation, storage and marketing of natural gas liquids.
Plains All American Pipeline’s historical revenue and net income:
The analysis on Plains All American Pipeline reports that the company has issued $1.9 billion over the past three years, its operating margin is expanding and its asset growth is currently faster than its revenue growth.
There are only two gurus that hold a position in PAA. John Keeley (Trades, Portfolio) holds on to 37,420 shares, representing 0.01% of the company’s shares outstanding, and Jim Simons (Trades, Portfolio) owns 1,374,300 shares, representing 0.4% of the company’s shares outstanding.
The company recently announced that their fourth quarter earnings will be released on Feb. 5 after market close.
At the end of December Plains All American Pipeline announced that they had completed their merger of PAA Natural Gas Storage. The transaction is expected to result in the issuance of approximately 14.7 million common shares of PAA. This merger finalized and the company began trading as PAA on Jan. 2, 2014.
The Peter Lynch Chart suggests that the company is currently overvalued:
Plains All American Pipeline has a market cap of $17.51 billion. Its shares are currently trading at around $50.99 with a P/E ratio of 17.50, a P/S ratio of 0.40 and a P/B ratio of 2.40. The company had an annual average earnings growth of 26.30% over the past ten years.
GuruFocus rated PAA the business predictability rank of 2-star.
To view a complete list of high yielding dividend stocks found among the gurus’ portfolios, click here.
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