During the past week, GuruFocus recognized five 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 five 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:
Southern Co. (SO)
On Jan. 17, Southern Co. declared a dividend of $0.508 per share, representing 4.90% dividend yield for the company. This dividend is payable on Mar. 6 to shareholders of the record at the close of business on Feb. 3, 2014.
The company’s historical dividend growth is as follows:
· 10-year: 4.00%
· 5-year: 4.00%
· 3-year: 3.90%
This most recent dividend marks the 265th consecutive quarterly dividend issued to shareholders. The company has been distributing quarterly dividends since 1948.
Southern Company is an Atlanta-based energy company that serves approximately 4.4 million customers and maintains nearly 46,000 megawatts of generating capacity.
Southern Co.’s historical revenue and net income:
The company recently completed a $109 million smart grid improvement project. Through this project the company has created 73 self-healing networks made up of 174 feeders which help to isolate problems and restore power to unaffected areas that have observed service disruptions.
The Peter Lynch Chart shows that Southern Co. appears to be overvalued:
Southern Company has a market cap of $36.29 billion. Its shares are currently being traded at around $41.16 with a P/E ratio of 22.40, a P/S ratio of 2.10 and a P/B ratio of 1.90. The company had an annual average earnings growth of 3.9% over the past 10 years.
Hotchkis & Wiley, Pioneer Investments (Trades, Portfolio) and Jim Simons (Trades, Portfolio) hold the largest stake in SO. Check out all the gurus’ holding histories of Southern Co here.
Dominion Resources (D)
On Jan. 17, Dominion Resources declared a dividend of $0.60 per share, representing 3.40% dividend yield for the company. This dividend is payable on Mar. 20 to shareholders of the record at the close of business on Feb. 28, 2014.
The company’s historical dividend growth is as follows:
· 10-year: 6.10%
· 5-year: 7.20%
· 3-year: 6.40%
This dividend marks the 344th consecutive dividend for Dominion or its predecessor company.
Dominion Resources is provider of electricity, natural gas and related services to customers mainly in the eastern region of the U.S. It manages its daily operations through three operating segments: Dominion Virginia Power of DVP, Dominion Energy and Dominion Generation.
Dominion Resources’ historical revenue and net income:
The analysis on Dominion reports that the company’s revenue has been in decline over the past five years, it has issued $4.5 billion of debt over the past three years and its price is at a 10-year high.
The company recently promoted seven of its employees to officer positions. These employees were all promoted to various Vice President Positions. Check out more on these moves here.
The Peter Lynch Chart suggests that the company is currently overvalued:
Dominion Resources has a market cap of $38.75 billion. Its shares are currently trading at around $66.76 with a P/E ratio of 63.80, a P/S ratio of 2.90 and a P/B ratio of 3.40. The company had an annual average earnings growth of 2.40% over the past ten years.
There are currently seven gurus with a position in Dominion Resources. Check them out here.
ONEOK Partners (OKS)
On Jan. 16, ONEOK Partners declared a dividend of $0.730 per share, representing 5.60% 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: 5.80%
· 5-year: 5.00%
· 3-year: 6.20%
This quarterly distribution represents a 0.5 cent increase in distribution amount from $0.725 per share to $0.73 per share. It represents an annualized cash distribution of $2.92 per share for the year.
In December the company announced that it indicated that it expects to increase its distribution by 1.5 cents per unit per quarter in 2014 and is working towards achieving an average annual distribution increase of 6% to 8% between 2013 and 2016. Â Â
ONEOK Partners is one of the largest publicly traded master limited partnerships. It is also considered a leader in the gathering, processing, storage and transportation of natural gas in the U.S. and is the owner of one of the nation’s premier natural gas liquids systems, connecting the NGL supply in the Mid-Continent and Rocky Mountain regions with its key market centers.
ONEOK’s historical revenue and net income:
The analysis on ONEOK reports that the company’s revenue has been in decline over the past year, its dividend is at a 2-year high and its operating margin is expanding.
The Peter Lynch Chart suggests that the company is currently overvalued:
The company is set to release its fourth quarter and year end 2013 financial results on Feb. 24, 2014.
ONEOK Partners LP has a market cap of $11.88 billion. Its shares are currently trading at around $51.29 with a P/E ratio of 21.90, a P/S ratio of 1.00 and a P/B ratio of 2.20. The company had an annual average earnings growth of 4.60% over the past ten years.
Three gurus currently hold a position in ONEOK.
GuruFocus rated ONEOK Partners the business predictability rank of 2.5-star.
Vornado Realty Trust (VNO)
On Jan. 15, Vornado Realty Trust declared a dividend of $0.730 per share, representing 3.20% dividend yield for the company. This dividend is payable on Feb. 18 to shareholders of the record at the close of business on Jan. 27, 2014.
The company’s historical dividend growth is as follows:
· 10-year: -1.20%
· 5-year: -2.30%
· 3-year: 10.00%
Vornado Realty Trust is a fully integrated REIT. The company is one of the largest owners and managers of commercial real estate in the US with a portfolio of over 100 million square feet. The company’s core businesses include: New York, Washington, DC, and retail properties in the northeast states, California and Puerto Rico.
Vornado Realty Trust’s historical revenue and net income:
The company is set to release its third quarter financials today after market close.
The analysis on Vornado reports that the company’s operating margin is expanding and that its price and P/S ratio are nearing a 5-year high.
The Peter Lynch Chart suggests that the company is currently overvalued:
The company recently announced that it will record its 32.6% share of Toys “R” Us third quarter financial results in its fourth quarter results. Based on Toys information currently available to Vornado, Vornado's results will include in its fourth quarter a net loss of $130,851,000, or $0.66 per diluted share, attributable to Toys 2013 third quarter.
Vornado Realty Trust has a market cap of $17.27 billion. Its shares are currently trading at around $92.33 with a P/E ratio of 33.00, a P/S ratio of 7.50 and a P/B ratio of 3.00. Vornado Realty Trust had an annual average earnings growth of 8.40% over the past five years.
Check out the company’s total dividend return calculator.
Kinder Morgan Energy Partners (KMP)
On Jan. 15, Kinder Morgan Energy Partners declared a dividend of $1.36 per share, representing 6.40% 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: 7.40%
· 5-year: 5.40%
· 3-year: 4.90%
The company’s most recent quarterly distribution represents an increase of 7% from the third quarter of 2012. KMP has increased the distribution 49 times since the current management took over the company in 1997.
Kinder Morgan is the largest midstream and third largest energy company in North America. The company’s pipelines transport natural gas, refined petroleum products, crude oil and carbon dioxide. They also store or handle products such as gasoline, jet fuel, ethanol, coal, petroleum coke and steel.
Kinder Morgan’s historical revenue and net income:
The company also highlighted some results for the first nine months of the year:
· Distributable Cash Flow of $$1.609 billion, up 25% from last year.
· Net income before certain items was $1.946 billion, compared to $1.575 billion in 2012.
· Certain items totaled a net gain of approximately $553 million, versus a loss of $821 million.
The Peter Lynch Chart suggests that the company is currently overvalued:
Kinder Morgan Energy Partners has a market cap of $36 billion. Its shares are currently trading at around $82.23 with a P/E ratio of 62.30, a P/S ratio of 2.90 and a P/B ratio of 2.10. The company had an annual average growth of 6.40% over the past ten years.
To view a complete list of high yielding dividend stocks found among the gurus’ portfolios, click here.
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