For Investors Only: Dividends In Energy

On May 13, 2014, I posted:

The big story today, for investors: BHI raised its dividend, the first time the company has raised its dividend since 2008. Anadarko raised its dividend by 50%. Now, I look for an announcement that CVX or XOM or both to announce a 2-1 split. COP did the spin-off and raised dividends significantly in the last couple of years; CVX beat the Ecuador rap, and XOM is, well, XOM. So, we'll see. 

Then last night:

Readers may have noticed I've reported that a fair number of energy companies have recently declared increased dividends or dividends for the first time in quite some years. It was just something I noticed; no statistical analysis to see if accurate. Interestingly, the lead story in this week's issue of Bloomberg Businessweek, "Choosing Profits Over Productivity," which according to the writer/editor: "Bottom line -- productivity growth is stalling while companies spend their $2 trillion cash hoard on buybacks and dividends." Wow: saying exactly what I thought I was seeing. It's a nice two-page article.

Then, earlier today, Fitzsimmons on Phillips 66:

The headline suggests Phillips 66 is an outstanding dividend growth stock.

In the last couple of days, on a couple of different occasions, I posted comments about the dividend phenomenon noted this past earnings season. It's nice to see this observation validated. The dividend announcement that really surprised me was the one by Baker Hughes: the company is raising its dividend for the first time since 2008. That speaks volumes. Then the Phillips 66 article: the company has raised its dividend four times since 2012 (and they were increases of 25%, not trivial; the most recent announcement was an exception: 28%).

Completely unintentionally, while looking for something else, I stumbled across this article which I'm sure everyone else noticed -- actually I saw it earlier but due to a busy earnings season could not get to it, and then forgot about it. Motley Fool discusses this champion dividend payer: ENB --

This stock is one of the most stable income investments I have ever found.

The company’s facilities are some of the lowest risk and most irreplaceable assets in the world. Thanks in part to the monopoly status it holds on these properties, the company has reported record profits quarter after quarter.

That’s great news for its shareholders because this company returns almost all of its earnings to investors. Over the past decade, the firm has increased its dividend threefold and now pays $1.40 per share in dividends every year. This may very well be Canada’s top dividend stock — and it’s just be getting started.

But Enbridge might just be getting started. Thanks to the energy boom we are witnessing across the continent, the amount of oil and gas currently being pulled out of the ground is only a sliver of what we’re likely to see in the years ahead.

According to a recent report from Citibank, the combination of new oil sands production and shale drilling could grow North America’s petroleum output more than 50% by 2020. By the end of the decade the continent could achieve energy self-sufficiency. It’s a remarkable turnaround from only a few years ago when experts had left the domestic energy industry for dead.

To accommodate this boom, North America will require a massive build-out of its energy infrastructure. Companies that collect, store, and ship these oil and gas products are poised to make a fortune.

The article is a tease to get you to subscribe to their newsletter, but it was nice to see the article, continuing this unexpected discussion of dividends.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.