In light of low bond yields and the threat of interest rate risk, investing in dividends companies is attractive because of higher present yields and the opportunity for dividend growth. Income investors searching for growing dividends could benefit by adding energy shares to their portfolios.
The following dividend paying stocks and partnerships were screened for their long-term performance. Each of the following energy companies pays a dividend in excess of the 10-year treasury yield and had over a 5% average annual increase in dividend payments over the past 10 years. Thus, each of these dividend stocks pays more than Treasuries and has a long-term trend of dividend growth, which is better than the static interest payments on fixed-rate Treasuries.
Price multiples, dividend histories, and return of equity histories are provided below:
Arch Coal Inc. (ACI) recently traded at $14.13 per share. At this price level, the stock has a 2.8% dividend yield. For 10 out of the past 10 fiscal years, a share of ACI paid a total of $2.25 in dividends. Of these dividend payments, a total of $1.58 were paid in the last five years.
ACI shareholders have seen a 7.9% change in share price over the past year. At present, shares of this mid cap stock trade at a price-to-book ratio of 0.9, a price-to-earnings multiple of 19.8, and a price-to-sales multiple of 0.9 (trailing twelve months). Over the past decade shareholders enjoyed a 7.8% average annual return on equity.
Enterprise Products Partners LP (EPD) recently traded at $46.89 per share. At this price level, the stock has a 5.3% dividend yield. For 10 out of the past 10 fiscal years, a share of EPD paid a total of $17.33 in dividends. Of these dividend payments, a total of $10.23 were paid in the last five years.
EPD shareholders have seen a 0.5% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 3.6, a price-to-earnings multiple of 24.8, and a price-to-sales multiple of 1.0 (trailing twelve months). Over the past decade shareholders savored a 10.3% average annual return on equity.
Energy Transfer Partners LP (ETP) recently traded at $47.13 per share. At this price level, the stock has a 7.6% dividend yield. For 10 out of the past 10 fiscal years, a share of ETP paid a total of $23.25 in dividends. Of these dividend payments, a total of $16.33 were paid in the last five years.
ETP shareholders have seen a 3.2% change in share price over the past year. At present, shares of this mid cap stock trade at a price-to-book ratio of 1.9, a price-to-earnings multiple of 35.0, and a price-to-sales multiple of 1.4 (trailing twelve months). Over the past decade shareholders savored a 17.1% average annual return on equity.
Kinder Morgan Energy Partners LP (KMP) recently traded at $83.18 per share. At this price level, the stock has a 5.6% dividend yield. For 10 out of the past 10 fiscal years, a share of KMP paid a total of $31.90 in dividends. Of these dividend payments, a total of $19.03 were paid in the last five years.
KMP shareholders have sustained a -2.7% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 3.6, a price-to-earnings multiple of 516.7, and a price-to-sales multiple of 3.4 (trailing twelve months). Over the past decade shareholders savored a 15.8% average annual return on equity.
Magellan Midstream Partners LP (MMP) recently traded at $65.12 per share. At this price level, the stock has a 4.9% dividend yield. For 10 out of the past 10 fiscal years, a share of MMP paid a total of $20.48 in dividends. Of these dividend payments, a total of $13.25 were paid in the last five years.
MMP shareholders have endured a -5.6% change in share price over the past year. At present, shares of this mid cap stock trade at a price-to-book ratio of 5.0, a price-to-earnings multiple of 18.7, and a price-to-sales multiple of 4.4 (trailing twelve months). Over the past decade shareholders savored a 22.4% average annual return on equity.
Plains All American Pipeline, L.P. (PAA) recently traded at $73.47 per share. At this price level, the stock has a 5.5% dividend yield. For 10 out of the past 10 fiscal years, a share of PAA paid a total of $28.16 in dividends. Of these dividend payments, a total of $17.03 were paid in the last five years.
PAA shareholders have sustained a -0.8% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 2.2, a price-to-earnings multiple of 17.4, and a price-to-sales multiple of 0.4 (trailing twelve months). Over the past decade shareholders savored a 12.7% average annual return on equity.
RPC Inc. (RES) recently traded at $18.36 per share. At this price level, the stock has a 2.1% dividend yield. For 10 out of the past 10 fiscal years, a share of RES paid a total of $0.80 in dividends. Of these dividend payments, a total of $0.67 were paid in the last five years.
RES shareholders have seen a 5.2% change in share price over the past year. At present, shares of this mid cap stock trade at a price-to-book ratio of 4.0, a price-to-earnings multiple of 10.2, and a price-to-sales multiple of 1.7 (trailing twelve months). Over the past decade shareholders savored a 17.2% average annual return on equity.
Valero Energy Corporation (VLO) recently traded at $21.02 per share. At this price level, the stock has a 2.9% dividend yield. For 10 out of the past 10 fiscal years, a share of VLO paid a total of $2.77 in dividends. Of these dividend payments, a total of $2.15 were paid in the last five years.
VLO shareholders have sustained a -0.5% change in share price over the past year. At present, shares of this large cap stock trade at a price-to-book ratio of 0.7, a price-to-earnings multiple of 5.4, and a price-to-sales multiple of 0.1 (trailing twelve months). Over the past decade shareholders savored a 12.5% average annual return on equity.
Exxon Mobil Corporation (XOM) recently traded at $84.88 per share. At this price level, the stock has a 2.2% dividend yield. For 10 out of the past 10 fiscal years, a share of XOM paid a total of $12.61 in dividends.
XOM shareholders have seen a return to share price from a year ago. At present, shares of this large cap stock trade at a price-to-book ratio of 2.6, a price-to-earnings multiple of 10.2, and a price-to-sales multiple of 0.9 (trailing twelve months). Over the past decade shareholders savored a 27.0% average annual return on equity.
Clearly there are some attractive dividend yields and long term track records of ROE and dividend growth among energy companies. XOM, VLO, and RES are trading at attractive price multiples and warrant additional consideration for your income portfolio.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing. I repeat: this research does not constitute a guarantee.
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