As many income investors know, dividend investing can result in the guarantee of income or in certain cases where the investor has a dividend reinvestment account, more shares. I personally prefer the latter, but that's just me. In the case of the two stocks featured the dividend increases shouldn't be the only factors taken into account before establishing a position.
Vanguard Natural Resources, LLC (VNR) announced a 1.3% or $0.0025/share increase on November 16, to its current dividend of $0.20/share. As a result of the increase the company now yields 9.35% ($2.43) on an annual basis, which is then broken down and distributed to shareholders each month.
For potential investors of Vanguard Natural Resources, the dividend hike isn't the only catalyst long-term investors should consider. In fact, there are two ancillary catalysts potential investors need to examine before moving forward. The first catalyst to consider is the fact the stock is trading at a 5.59% discount to its current 50-DMA and a 1.13% premium to its current 200-DMA. The second of the two catalysts to consider is the announcement VNR has made regarding the acquisition of several non-operated oil and gas properties in Montana for $131 million. One of the benefits to this transaction is the fact it will immediately affect the company's cash flow per day. According to FlyOnTheWall.com, "The properties are located in the Bakken trend and are characterized by mature oil production with some associated natural gas production. The properties will be immediately accretive to cash flow and have current net production of approximately 1,100 BOE per day."
MDU Resources Group, Inc. (MDU) announced a 3.0% or $0.005/share increase on November 15, to its current dividend of $0.1675/share. As a result of the increase the company now yields 3.52% ($0.69) on an annual basis, which is then broken down and distributed to shareholders each quarter.
For potential investors of MDU Resources Group, the dividend hike isn't the only catalyst long-term that should be considered. In fact, there are two ancillary catalysts potential investors need to examine before moving forward. The first catalyst to consider is the fact the stock is trading at a 6.23% discount to its current 50-DMA and a 9.05% premium to its current 200-DMA. The second catalyst to consider isn't a single event but rather pertains to the company's most recent quarterly report, which contains two key variables potential investors should note. The company's earnings increased 32% at its electrical utility, which was fueled largely by an increase in customers, and 36% in its construction group, which was fueled by the growth in workloads and improving margins.
For potential investors looking to establish a position in either Vanguard or MDU, I'd continue to take a closer look at each company and keep in mind the developments taking place at the company's properties within the Bakken. As is the case with any of the natural resources plays, the slightest hint or indication of negative news with regard to daily production or a suspension of production and a sell-off would certainly ensue. If potential investors are looking to scoop up shares based on value, in the wake of each company's discount to their current 50- and 200-DMAs I strongly believe now is the time to do it.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.