Dividend Increases: July 22-26, 2019 (Part 1: Utilities And Energy Sectors)

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Includes: EE, EQM, MMP, MPLX, NEP, OKE, SHLX, UGI, WTR
by: FerdiS
Summary

Earnings season means many dividend increases to report! Part 1 covers the Utilities and Energy sectors.

I like monitoring dividend increase announcement as it helps me to identify candidates for further analysis.

As a bonus, I provide a summary of available ex-dividend dates for the next two weeks.

Monitoring dividend increases for stocks on my watch list helps me identify candidates for further analysis. Companies can only increase their dividends regularly and sustainably if earnings grow sufficiently.

I look for dividend increase announcements for stocks in the CCC List, but I use several screens to limit the number of stocks to monitor:

  • Dividend Yield ≥ 1.0%
  • Market cap ≥ $1 billion
  • No stocks that are being acquired
  • No Over-The-Counter or Pink Sheet stocks

This past week, 30 companies that declared dividend increases passed these screens. Part 1 covers the Utilities and Energy sectors. See the upcoming Part 2 and Part 3 for coverage of the other sectors.

The table below presents a summary of these increases.

The table is sorted by the percentage increase, %Incr. Dividends are annualized and in US$, unless otherwise indicated. Yield is the new dividend yield for the market close Price on the date listed. Yrs are years of consecutive dividend increases, while 5-yr DGR is the compound annual growth rate of the dividend over a five-year period. 1-yr %Incr is the percentage increase from the year-ago dividend. (Some companies increase their dividends more than once a year, so this puts the most recent dividend increase in context).

Summary of Dividend Increases: July 22-26, 2019

Previous Post: Dividend Increases: July 15-19, 2019

UGI (UGI)

UGI distributes, stores, transports, and markets energy products and related services. The company distributes propane throughout the United States. It also distributes liquid petroleum gas, natural gas, liquid fuels, and electricity, and operates several electric generation facilities. UGI was founded in 1882 and is based in King of Prussia, Pennsylvania.

The company's board of directors approved an increase in the quarterly dividend of 8.33% to 32.5¢ per share. All shareholders of record on August 9 will receive the new dividend on October 1.

Aqua America (WTR)

Founded in 1968 and based in Bryn Mawr, Pennsylvania, WTR is a holding company that provides water or wastewater services in the United States. WTR serves residential water, commercial water, fire protection, industrial water, wastewater, and other water customers in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, and Virginia.

On July 25, the board of directors approved an increase to the regular quarterly dividend from 21.90¢ per share to 23.43¢ per share, an increase of 6.99%. The quarterly dividend will be paid on September 1 to shareholders of record on August 16. The ex-dividend date is August 15.

El Paso Electric (EE)

Founded in 1901 and based in El Paso, Texas, EE is a public utility company engaged in the generation, transmission, and distribution of electricity in west Texas and southern New Mexico. The company has ownership interests in various electrical generating facilities. EE’s energy sources include nuclear fuel, natural gas, coal, solar, and wind.

The company declared a quarterly dividend of 38.5¢ per share, an increase of 6.94% over the prior quarterly dividend. EE will trade ex-dividend on September 13. The dividend is payable on September 30 to shareholders of record on September 16.

NextEra Energy Partners (NEP)

NEP acquires, owns, and operates contracted clean energy projects in the United States and Canada. The company owns a portfolio of contracted renewable generation assets consisting of wind and solar projects, as well as seven contracted natural gas pipeline assets. NEP was founded in 2014 and is based in Juno Beach, Florida.

Recently, NEP increased its quarterly dividend from 48.25¢ per share to 50.25¢ per share, an increase of 4.15%. The dividend is payable on August 14 to shareholders of record at the close of business on August 6.

Shell Midstream Partners (SHLX)

SHLX owns, operates, develops, and acquires pipelines and other midstream assets in the United States. The company owns interests in crude oil and refined products pipelines and terminals to transport onshore and offshore crude oil production to Gulf Coast and Midwest refining markets. SHLX founded in 2014 and is headquartered in Houston, Texas.

On July 25, the company declared a dividend of 43¢ per share. The new dividend represents a 3.61% increase. The quarterly dividend will be paid on August 14 to shareholders of record on August 5. The ex-dividend date is August 2.

ONEOK (OKE)

OKE is an energy midstream service provider in the United States. The company purchases, gathers, compresses, transports, stores, and distributes natural gas. It also leases pipeline capacity to others. OKE drills for and produces oil and gas, extracts and sells natural gas liquids, and is engaged in the gas marketing business.

The board of directors of OKE has declared a quarterly dividend of 89¢ per share. The new dividend is 2.89% above the prior dividend of 86.50¢ per share. The stock will trade ex-dividend on August 5, and shareholders can expect to receive the new dividend on August 14.

MPLX (MPLX)

Founded in 2012 and based in Findlay, Ohio, MPLX is a master limited partnership that owns, operates, develops, and acquires midstream energy infrastructure assets. MPLX gathers, processes, and transports natural gas. The company also gathers, transports, stores, and markets natural gas liquids, and crude oil and refined petroleum products.

Recently, MPLX increased its quarterly dividend from 65.75¢ per share to 66.75¢ per share, an increase of 1.52%. All shareholders of record on August 5 will receive the new dividend on August 14.

EQT Midstream Partners (EQM)

Founded in 1925 and headquartered in Pittsburgh, Pennsylvania, EQM operates as an integrated energy company in the United States. The company explores for, develops, and produces natural gas, natural gas liquids, and crude oil primarily in the Appalachian Basin. EQM provides natural gas transmission, storage and gathering services in southwestern Pennsylvania and northern West Virginia.

Recently, EQM increased its quarterly dividend to $1.16 per share, an increase of 1.31% over the prior dividend of 114.50¢ per share. The stock will trade ex-dividend on August 1, and shareholders can expect to receive the new dividend on August 13.

Magellan Midstream Partners (MMP)

Founded in 2000 and headquartered in Tulsa, Oklahoma, MMP is a publicly-traded partnership engaged in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. MMP owns the longest refined products pipeline in the USA, with access to about half of the nation’s refining capacity.

On July 25, the company declared a dividend of $1.0125¢ per share. The new dividend represents a 0.75% increase. The dividend is payable on August 14 to shareholders of record on August 7. The stock will trade ex-dividend on August 6.

Please note that I'm not recommending any of these stocks. Readers should do their own research on these companies before buying shares.

Below, I'm including charts from F.A.S.T. Graphs for three of this week's dividend raisers, UGI, WTR, and EE.

In these charts, the black line represents the share price, and the blue line represents the calculated P/E multiple at which the market has tended to value the stock over time. The orange line is the primary valuation reference line. It is based on one of three valuation formulas depending on the earnings growth rate achieved over the time frame in question. (The Adjusted Earnings Growth Rate represents the slope of the orange line in the chart).

UGI's price line (black) is above the primary valuation line (orange) and above the stock's normal P/E ratio (blue). The stock is trading at a premium to fair value. An investment in UGI in October 2010 would have returned 13.7% on an annualized basis (with dividends included).

WTR's price line is above the stock's normal P/E ratio and above the primary valuation line. The stock is trading at a premium to fair value. An investment in WTR in January 2010 would have returned 13.6% on an annualized basis (with dividends included).

EE's price line is above the primary valuation line and above the stock's normal P/E ratio. The stock is trading at a premium to fair value. An investment in EE in January 2010 would have returned 14.7% on an annualized basis (with dividends included).

Upcoming Ex-Dividend Dates

As a bonus, here is a summary of available ex-dividend dates for the next two weeks. You must own a stock before its ex-dividend date to be eligible to receive the next dividend.

The table is sorted by Ticker, and as before, Next Div is annualized. Note that only ex-dividend dates of stocks in the Utilities and Energy sectors are included. See Part 2 and Part 3 of this article for the ex-dividend dates of stocks in the remaining sectors.

Summary of Upcoming Ex-Dividend Dates: July 30-August 12, 2019

Company

Ticker

Yield

RecentPrice

Yrs

5-YrDGR

NextDiv.

Ex-DivDate

Pay- ableDate

American Electric Power

AEP

3.01%

$88.95

9

5.30%

$2.68

08/08

09/10

AES

AES

3.22%

$16.94

8

26.60%

$0.55

07/31

08/15

American Water Works

AWK

1.74%

$115.09

12

10.30%

$2.00

08/08

09/04

CMS Energy

CMS

2.61%

$58.69

13

7.00%

$1.53

08/01

08/30

Idacorp

IDA

2.46%

$102.27

7

8.90%

$2.52

08/02

08/30

Alliant Energy

LNT

2.85%

$49.79

16

7.30%

$1.42

07/30

08/15

NiSource

NI

2.71%

$29.50

8

15.20%

$0.80

07/30

08/20

Northwest Natural

NWN

2.66%

$71.52

63

0.70%

$1.90

07/30

08/15

ONE Gas

OGS

2.20%

$90.82

6

N/A

$2.00

08/09

09/03

PNM Resources

PNM

2.30%

$50.50

8

10.60%

$1.16

08/05

08/16

Pinnacle West Capital

PNW

3.21%

$92.02

7

5.10%

$2.95

07/31

09/03

SJW

SJW

1.86%

$64.43

52

8.90%

$1.20

08/02

09/03

Tallgrass Energy GP

TGE

10.29%

$21.00

5

N/A

$2.16

07/30

08/14

UGI

UGI

2.55%

$50.92

32

6.70%

$1.30

08/08

10/01

Valero Energy

VLO

4.27%

$84.31

9

30.90%

$3.60

08/05

09/04

Update, July 30, 2019, 10:20 a.m.: The table above has been updated to reflect corrected "next dividend" dates for a number of companies.

Thanks for reading and happy investing!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.