3 Unknown But Amazing Dividend Stocks
Investors looking for income have many reliable options dividend shares. Because there are so many to choose from, some great ones can be overlooked.
Three of these companies are sleepy utility PPL (NYSE: PPL), Canadian intermediary operator Pembina pipeline (NYSE: PBA), and master of the limited partnership (MLP) Phillips 66 Partners (NYSE: PSXP). Here’s why investors will want to know about these fantastic dividend-paying stocks.
As stable as they come
PPL operates several regulated electricity and gas utilities in Pennsylvania, Kentucky and the United Kingdom. It has been a great dividend stock over the years. He has not only paid his investors in each of the last 294 consecutive quarters, but has also increased his payout every year since 2011. These steady increases have helped raise the utility’s performance to well above average. 5.6%.
This trend is expected to continue over the next few years. PPL currently plans to invest $ 15 billion through 2023 to expand its business. These investments allow the company to increase earnings per share at an annual rate of 5% to 6% until at least 2020, which should support steady dividend growth. As a result, PPL has the potential to generate total returns for shareholders in the range of 10% to 12% per year. That’s why investors won’t want to continue overhanging the company.
Get paid every month
Pembina Pipeline operates a diversified portfolio of midstream infrastructure in the United States and Canada. Because these assets generate stable cash flow, Pembina has been able to pay its investors a constant dividend. What sets its payment apart from most companies is that Pembina cuts a check to its investors every month rather than quarterly. Meanwhile, it has steadily increased its monthly dividend each year for the past decade, growing it at a compound annual rate of 4.5%.
More dividend growth is coming. Pembina has already announced plans to increase its payments by 5% following the acquisition of Kinder Morgan Canada and another pipeline from the American energy infrastructure giant Kinder Morgan. In addition to the boost from this deal, Pembina has C $ 5.5 billion ($ 4.2 billion) in expansion projects currently under construction, which will increase its cash flow over the next several years. On top of that, it has another C $ 10 billion ($ 7.6 billion) of projects under development, which should give it plenty of fuel to continue growing its dividend by 4.7% in the future. years to come.
High octane revenue growth
Phillips 66 Partners is an MLP focused primarily on owning oil and natural gas liquids infrastructure. The company has grown at a rapid pace over the years by acquiring assets from its parent company, refiner Phillips 66. This strategy has allowed MLP to increase its distribution to investors in the 23 quarters since its IPO in 2013, growing it at a compound annual rate of 30% through the end of 2018. While the rate of Phillip 66 Partners’ growth has slowed this year, its latest increase was still healthy 14% above the level of the previous year.
Phillips 66 Partners is expected to have enough fuel to continue growing its payments at an above average rate in the years to come. Although it acquired most of Phillips 66’s mid-level assets, MLP shifted its growth engine to run on organic expansion projects. It currently has several under construction, including a full-scale pipeline that will transport oil from the Permian Basin to the Gulf Coast. As these projects go live, they will provide Phillips 66 Partners with more cash flow than it can use to increase its dividend by 6.3%.
Great options for a growing income stream
This trio of energy companies are probably not the first that spring to mind when investors consider adding another income stock to their portfolios. However, as their story shows, each did an amazing job paying dividends. Better yet, all three have enough fuel to increase their already attractive payouts in the years to come. This makes them ideal options for income-oriented investors.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.