Dividend Aristocrats Week in Review for August 2, 2014: These Two Energy Companies Announced Quarterly Dividends

Seven Dividend Aristocrats had dividend announcements this week, while among High Yield Dividend Aristocrats one company increased its dividend and four others announced regular dividend payments.

The seven Dividend Aristocrats included two of the largest oil and energy companies, along with the owner of the Standard & Poor’s brand:

Chevron, a recently added Dividend Aristocrat, has increased dividends for  27 years. Photo courtesy Alden Jewell/flickr.com.

Chevron, a recently added Dividend Aristocrat, has increased dividends for 27 years.
Photo courtesy Alden Jewell/flickr.com.

Oil and energy companies Exxon-Mobil (XOM) and Chevron (CVX) announced their next quarterly dividend payments.

Both companies will pay their next quarterly dividend on September 10th to shareholders of record in mid-August: August 13th for Exxon-Mobil and August 19th for Chevron.  Chevron, which marked its 27th straight year of dividend growth by increasing its dividend by 7% in April, will pay $1.07 per share.  Exxon-Mobil will pay 69 cents per share, and has increased dividends for 32 years.  With the sell off this week, Chevron stock currently yields 3.35% and Exxon-Mobil stock yields 2.79%.

HCP, Inc. (HCP), the only health care real estate investment trust in the Dividend Aristocrats, will pay a quarterly dividend of 54.5 cents per share on August 26th to shareholders of record on August 11th.  The company has increased its dividend for 29 consecutive years.  With an annualized dividend of $2.18, the stock sports a yield of 5.22% and is currently the highest yielding Dividend Aristocrat in the index.  You should be aware that part of the dividend is considered a capital gain and is treated differently for tax purposes.

Also paying a quarterly dividend on September 10th, financial intelligence company McGraw Hill Financial (MHFI), owner of the J. D. Power and S&P brands, will pay 30 cents per share to shareholders of record on August 26th.  McGraw Hill has compounded dividends at 9.5% since 1974; the stock currently yields 1.51%.

Insurer Aflac (AFL) will pay a quarterly dividend of 37 cents per share on September 2nd to shareholders of record on August 20th.  The company has increased dividends for 31 years and last increased dividends in the 4th quarter of 2013 by 5.7%, or 2 cents per share.  I expect the next dividend increase to be announced in October and paid in December.  The stock currently yields 2.50%.

W. W. Grainger (GWW) currently yields 1.84% and will pay a quarterly dividend of $1.08 per share on September 1st to shareholders of record on August 11th.  The company increased the dividend payout for the 43rd consecutive year in the first quarter.  Grainger has more than doubled its dividend over the last 5 years, with an annual compounded dividend growth rate of 18.56% over that time.  You can read my company summary for Grainger for more information about the company’s outstanding history of dividend growth.

Kimberly-Clark Corporation (KMB) will pay a quarterly dividend of 84 cents per share on October 2nd to shareholders of record on September 5th.  The manufacturer of consumer brands such as Kleenex, Scotts and Huggies has grown its dividend for 42 years.  The stock currently yields 3.20%.  I have a company summary for Kimberly-Clark available, with information about the company’s dividend history and direct purchase and dividend reinvestment plans.

5 High Yield Dividend Aristocrat Components Announce Dividends

Diebold, Incorporated (DBD), manufacturer of self-service technologies (e.g., ATMs) and security systems, will pay a quarterly dividend of 28.75 cents on September 12th to shareholders of record on August 22nd.  Diebold has one of the longest records of dividend growth, having increased its annual dividend for 61 years.  I expect Diebold to announce its next dividend increase in February.  The stock currently yields 3.03%.

Financial holding company Cullen/Frost Bankers, Inc. (CFR), which serves individuals and businesses in Texas, will pay a quarterly dividend of 51 cents on September 15th to shareholders of record on August 29th.  The company increased stock dividend for the 20th straight year in June, raising the quarterly payout by a penny – or 2% – to the current payout rate.  At an annualized rate of $2.04, the stock currently yields 2.68%.

Besides the Chevron and Exxon-Mobil announcements, three smaller energy companies also announced dividend events this week:

Natural gas and electrical utility operator UGI Corporation (UGI) announced an increase to its regular stock dividend and a 3-for-2 stock split.  UGI serves customers in Pennsylvania.  This is UGI’s 27th consecutive annual dividend increase and raises the quarterly payout by 10.2% to a post-split 32.5 cents per share from 29.5 cents.  This is significantly higher than the long-term dividend growth announced by UGI’s President and CEO, John L. Walsh who stated in the company’s press release:

…we remain confident that we will achieve our stated objectives of growing earnings per share at a long-term average of 6% to 10% per year and growing our dividend at a rate of 4% per year.

The additional shares from the stock split will be distributed on September 5th to shareholders of record on August 22nd, while the increased dividend will be paid on October 1st to shareholders of record on September 15th.  UGI’s stock currently yields 2.68%.

Questar Corporation (STR), a Rocky Mountains-based integrated natural gas company, will pay a quarterly dividend of 19 cents on September 8th to shareholders of record on August 15th.  Questar has paid dividends for nearly 70 years and increased them for the last 42 years.  The company last increased the dividend on the prior announcement, raising the dividend by 5.6% from an annualized dividend of 72 cents to the current rate of 76 cents.  The stock sold off heavily this week and currently yields 3.42%.

Another natural gas and electric utility operator, Black Hills Corporation (BKH) also announced its a dividend payout.  Black Hills, which is based in South Dakota and serves customers in South Dakota, Wyoming, Colorado, Nebraska, Kansas, Montana, and Iowa will pay a quarterly dividend of 39 cents on September 1st to shareholders of record on August 15th.  The company has increased its dividend for 44 consecutive years and last March increased the quarterly dividend by 2.6% from 38 cents to 39 cents.  The annual dividend of $1.56 gives the stock a current yield of 2.96%.

A High Yield Dividend Aristocrat Continues Its Dividend Reinvestment Plan

Finally, Aqua America (WTR) announced this week that it would continue the dividend reinvestment plan for registered shareholders.  Under the plan, reinvested dividends are used to purchase additional shares at a 5% discount to the market price.  While the company can choose to adjust the discount between 0 to 5%, the board of directors indicated that they had no plans to change the discount.  Aqua America is a water and wastewater utility serving nearly 3 million customers across Pennsylvania, Ohio, North Carolina, Texas, Illinois, New Jersey, Indiana and Virginia.  Based on its dividend growth history, I expect Aqua America to announce its 23rd consecutive annual dividend increase early this week.

There are 54 S&P Dividend Aristocrats that have increased dividends for more than a quarter century.  See the full list of Dividend Aristocrats.

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