Master Limited Partnerships Continue with Consistent Dividend Increases

A large number of dividend growth companies announced plans to boost distributions over the past week. I define consistent dividend paying companies as ones that have managed to reward shareholders with higher distributions for at least five consecutive years in a row. This list typically helps me in observing the rate of change in distributions in companies I own or would like to own at some price point. It is also helpful in getting acquainted with other companies for further research. Because of the long list of companies boosting distributions over the past week, I have separated the list of announced dividend hikes from the past week in several groups:

Mater Limited Partnerships

Many master limited partnerships have been able to boost distributions to unitholders through the recession, extreme oil and gas fluctuations and slow recovery. What is amazing about these companies is that typically they pay most of their distributable cash flows out to untiholders. As a result, their performance is closely tracked by distributions growth. In an MLP, I typically look for good coverage from DCF relative to peers, as well as potential for future distributions growth.

ONEOK Partners, L.P. (OKS) engages in the gathering, processing, storage, and transportation of natural gas in the United States. This master limited partnership raised quarterly distributions to 66 cents/unit. It has regularly boosted distributions for 7 years in a row. In a previous article I outlined the reasons why I choose to invest in this partnership. Yield: 4.60%

Western Gas Partners, LP (WES) owns, operates, acquires, and develops midstream energy assets in east, west, and south Texas; the Rocky Mountains; and the Mid-Continent. This master limited partnership raised quarterly distributions to 48 cents/unit. It has regularly boosted distributions for 5 years in a row. Yield: 4.20%

El Paso Pipeline Partners, L.P. (EPB) engages in the interstate storage and transportation of natural gas in the United States. This master limited partnership raised quarterly distributions to 55 cents/unit. It has regularly boosted distributions for 5 years in a row. Yield: 6.20%

Williams Partners L.P. (WPZ), an energy infrastructure company, focuses on connecting North America’s hydrocarbon resource plays to growing markets for natural gas and natural gas liquids. It operates in two segments, Gas Pipeline and Midstream Gas & Liquids. This master limited partnership raised quarterly distributions to 79.25 cents/unit. It has regularly boosted distributions for 8 years in a row. Yield: 5.90%

Holly Energy Partners, L.P. (HEP) operates a system of petroleum product and crude pipelines, storage tanks, distribution terminals, and loading rack facilities. This master limited partnership raised quarterly distributions to 91 cents/unit. It has regularly boosted distributions for 8 years in a row. Yield: 5.80%

Magellan Midstream Partners, L.P. (MMP) engages in the transportation, storage, and distribution of petroleum products in the United States. This master limited partnership raised quarterly distributions to 94.25 cents/unit. It has regularly boosted distributions for 12 years in a row. Yield: 4.80%

TC PipeLines, LP (TCP) transports natural gas to market hubs and consuming markets primarily in the western and midwestern United States, and central Canada. This master limited partnership raised quarterly distributions to 78 cents/unit. It has regularly boosted distributions for 12 years in a row. Yield: 7%

EV Energy Partners, L.P. (EVEP) engages in the acquisition, development, and production of oil and natural gas properties in the United States. This master limited partnership raised quarterly distributions to 76.50 cents/unit. It has regularly boosted distributions for 6 years in a row. Yield: 5.50%

DCP Midstream Partners, LP, (DPM) together with its subsidiaries, engages in gathering, compressing, treating, processing, transporting, storing, and selling natural gas in the United States. This master limited partnership raised quarterly distributions to 67 cents/unit. It has regularly boosted distributions for 7 years in a row. Yield: 6.50%

Vanguard Natural Resources, LLC (VNR), through its subsidiaries, engages in the acquisition and development of oil and natural gas properties in the United States. This master limited partnership raised quarterly distributions to 60 cents/unit. It has regularly boosted distributions for 5 years in a row. Yield: 8.60%

Former Dividend Aristocrats

The following three companies used to be on the dividend aristocrats lists in the 1990s, but were booted off either due to inability to boost distributions in the case of Kellogg and Baxter or due to dividends cuts in the case of International Flavors & Fragrances. I was planning on researching Kellogg a little further before deciding if I wanted to add to my position in a few months, before receiving disappointing dividend increase mentioned below:

Kellogg Company (K), together with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience food products primarily in North America, Europe, Latin America, and the Asia Pacific. The company raised its quarterly dividend by 2.30% to 44 cents/share. It has regularly raised dividends for 9 years in a row. Yield: 3.70%

International Flavors & Fragrances Inc. (IFF), together with its subsidiaries, creates, manufactures, and supplies flavor and fragrance products worldwide. The company raised its quarterly dividend by 9.70% to 34 cents/share. It has regularly raised dividends for 10 years in a row. Yield: 2.50%

Baxter International Inc. (BAX), through its subsidiaries, develops, manufactures, and markets products for people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. The company operates in two segments, BioScience and Medical Products. The company raised its quarterly dividend by 34.30% to 45 cents/share. It has regularly raised dividends for 6 years in a row. Yield: 2.90%

Emerging Dividend Growth Stocks

Emerging dividend growth stocks are the ones which have just or are about to attain a dividend achiever status, which typically happens after a decade of consistent dividend increases. If I have researched a stock, and like its fundamentals, valuation and growth characteristics, I would be looking to initiating a position in such a company.

Intel Corporation (INTC) designs, manufactures, and sells integrated digital technology platforms primarily in the Asia-Pacific, the Americas, Europe, and Japan. The company raised its quarterly dividend by 7.10% to 22.50 cents/share. It has regularly raised dividends for 10 years in a row. The company actually has delivered a nice dividend growth over the past decade, has sustainable distributions and offers attractive valuation at the moment. Being the leader in the competitive semiconductor industry helps as well. Yield: 3.50% (analysis)

Maxim Integrated Products, Inc. (MXIM) engages in designing, developing, manufacturing, and marketing various linear and mixed-signal integrated circuits worldwide. The company raised its quarterly dividend by 9.10% to 24 cents/share. It has regularly raised dividends for 11 years in a row. Yield: 3.60%

Crane Co. (CR) manufactures and sells engineered industrial products in the United States and internationally. The company operates in five segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling, and Controls. The company raised its quarterly dividend by 7.70% to 28 cents/share. It has regularly raised dividends for 8 years in a row. Yield: 2.90%

Republic Services, Inc. (RSG) provides non-hazardous solid waste collection, transfer, and disposal services for commercial, industrial, municipal, and residential customers in the United States and Puerto Rico. The company raised its quarterly dividend by 6.80% to 23.50 cents/share. It has regularly raised dividends for 10 years in a row. Yield: 3.40%

Financial Stocks that Escaped Housing Bubble

Another list of companies boosting distributions include small and medium sized banks, which have kept on boosting distributions. They had been able to reward shareholders with dividend raises during the crisis of 2007 – 2009, which effectively shows that they didn’t get too overextended during the Housing Bubble.

1st Source Corporation (SRCE) operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services to individuals and businesses in the United States. This dividend champion raised its quarterly dividend by 6.25% to 17 cents/share. It has regularly raised dividends for 25 years in a row. Yield: 3%

Community Trust Bancorp, Inc. (CTBI) operates as the holding company for Community Trust Bank, Inc. that provides various banking products and services. This dividend champion raised its quarterly dividend by 1.60% to 31.50 cents/share. It has regularly raised dividends for 32 years in a row. Yield: 3.60%

Bar Harbor Bankshares (BHB) operates as the holding company for Bar Harbor Bank & Trust that provides various banking products and services to individuals, businesses, not-for-profit organizations, and municipalities primarily in Hancock, Washington, and Knox counties. The company raised its quarterly dividend to 29.50 cents/share. It has regularly raised dividends for 9 years in a row. Yield: 3.40%

Bank of Marin Bancorp (BMRC) operates as the bank holding company for Bank of Marin that offers a range of commercial and retail banking products and services in California. The company raised its quarterly dividend by 5.90% to 18 cents/share. It has regularly raised dividends for 8 years in a row. Yield: 1.90%

United Financial Bancorp, Inc. (UBNK) operates as a holding company for United Bank that provides various banking products and services in Massachusetts. The company raised its quarterly dividend by 11.10% to 10 cents/share. It has regularly raised dividends for 7 years in a row. Yield: 2.80%

Full Disclosure: Long OKS

Relevant Articles:

- Master Limited Partnerships (MLPs) – an island of opportunity for dividend investors
- Historical changes of the S&P Dividend Aristocrats Index
- Intel Corporation (INTC) Dividend Stock Analysis 
- The ten year dividend growth requirement