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10 High Yield Energy Companies Increasing Their Dividends

As earnings season takes focus on the stock market, many energy companies are increasing their dividends.  While some of these energy plays are Bullish and others are Bearish, they are all playing the dividend growth game with investors.  Here are 10 energy stocks increasing their payouts in the past week.

El Paso Pipeline Partners, L.P. (EPB) increased its quarterly cash distribution per common unit to $0.55 ($2.20 annualized) payable on Aug. 14, 2012, to unitholders of record as of July 31, 2012. This represents a 15 percent increase over the second quarter 2011 cash distribution per unit of $0.48 ($1.92 annualized) and an 8 percent increase from $0.51 per unit ($2.04 annualized) for the first quarter of 2012. EPB has increased its cash distribution 17 consecutive quarters since its initial public offering in November 2007.

Bottom line: EPB has a current dividend yield of 6.23%.  It has an equity summary score of 7.8 out of 10 for a Bullish outlook.

Enterprise Products Partners L.P. (EPD) announced that the board of directors of its general partner declared an increase in the quarterly cash distribution rate paid to partners to $0.6350 per common unit, or $2.54 per unit on an annualized basis.  The quarterly distribution will be paid on Wednesday, August 8, 2012, to unitholders of record as of close of business on Tuesday, July 31, 2012. This distribution rate, which represents a 5 percent increase over the $0.6050 per unit distribution rate declared with respect to the second quarter of 2011, is the 41st distribution increase since Enterprise’s initial public offering in 1998 and the 32nd consecutive quarterly increase.

Bottom line: EPD has a current dividend yield of 4.65%.  It has an equity summary score of 7.1 out of 10 for a Bullish outlook.

Kinder Morgan Energy Partners, L.P. (KMP) ) today increased its quarterly cash distribution per common unit to $1.23 ($4.92 annualized) payable on Aug. 14, 2012, to unitholders of record as of July 31, 2012. This represents a 7 percent increase over the second quarter 2011 cash distribution per unit of $1.15 ($4.60 annualized) and is up from $1.20 per unit ($4.80 annualized) for the first quarter of 2012. KMP has increased the distribution 44 times since current management took over in February 1997.

Bottom line: KMP has a current dividend yield of 5.75%.  It has an equity summary score of 6.3 out of 10 for a Neutral outlook.

Western Gas Partners, LP (WES) announced that the board of directors of its general partner has declared a cash distribution of $0.48 per unit for the second quarter of 2012, representing a 4-percent increase over the prior quarter and a 19-percent increase over the second quarter of 2011. The distribution is payable on August 13, 2012, to unitholders of record at the close of business on July 31, 2012.

Bottom line: WES has a current dividend yield of 4.22%.  It has an equity summary score of 6.0 out of 10 for a Neutral outlook.

Targa Resources Partners LP (NGLS) announced today that the board of directors of its general partner has declared a quarterly cash distribution of 64.25¢ per common unit, or $2.57 per common unit on an annualized basis, for the second quarter 2012. The approved distribution represents an increase of approximately 3% over the previous quarter’s distribution and 13% over the distribution for the second quarter 2011. This cash distribution will be paid August 14, 2012 on all outstanding common units to holders of record as of the close of business on July 23, 2012.

Bottom line: NGLS has a current dividend yield of 6.76%.  It has an equity summary score of 5.4 out of 10 for a Neutral outlook.

Williams Company (WMB) also revised its outlook for FY13 downward, projecting EPS of $1.38, down from the prior guidance of $1.55, and below the consensus of $1.60.   WMB continues to expect to pay a full-year 2012 shareholder dividend of $1.20 per share, a 55% increase over 2011. The company confirmed it expects the full-year dividend it pays shareholders in each 2013 and 2014 to increase by 20% to $1.44 and $1.75 per share, respectively.

Bottom line: WMB has a current dividend yield of 3.99%.  It has an equity summary score of 4.8 out of 10 for a Neutral outlook.

Targa Resources Corp. (TRGP) announced today that its board of directors has declared a quarterly cash dividend of 39.375¢ per share, or $1.575 per common share on an annualized basis, for the second quarter 2012. The approved dividend represents increases of approximately 8% over the previous quarter’s dividend and 36% over the dividend for the second quarter 2011. This cash dividend will be paid August 15, 2012 on all outstanding common shares to holders of record as of the close of business on July 23, 2012.

Bottom line: TRGP has a current dividend yield of 3.51%.  It has an equity summary score of 3.6 out of 10 for a Neutral outlook.

Kinder Morgan, Inc. (KMI) reported second quarter cash available to pay dividends of $307 million, up 83 percent from $168 million for the comparable 2011 period. Through the first six months, KMI reported cash available to pay dividends of $610 million, 40 percent higher than $435 million for the first half of 2011. KMI is expected to finish the year significantly ahead of its published annual budget due to its recent acquisition of El Paso Corporation.  The board of directors increased the quarterly cash dividend to $0.35 per share ($1.40 annualized), which is payable on Aug.15, 2012, to shareholders of record as of July 31, 2012. This represents a 17 percent increase over the second quarter 2011 cash distribution per unit of $0.30 ($1.20 annualized) and is up 9 percent from the first quarter 2012 dividend of $0.32 ($1.28 annualized) per share.

Bottom line: KMI has a current dividend yield of 4.0%.  It has an equity summary score of 2.0 out of 10 for a Bearish outlook.

Williams Partners L.P. (WPZ) announced that the regular quarterly cash distribution its unitholders receive has been increased to $0.7925 per unit.  The board of directors of the partnership’s general partner has approved the quarterly cash distribution, which is payable on Aug. 10, 2012, to unitholders of record at the close of business on Aug. 3.  The new per-unit amount is an 8.2-percent increase over the partnership’s distribution of$0.7325 per unit that was paid in August 2011. It is also a 2-percent increase over the partnership’s first-quarter 2012 distribution of $0.7775 per unit.

Bottom line: WPZ has a current dividend yield of 5.63%.  It has an equity summary score of 2.0 out of 10 for a Bearish outlook.

Spectra Energy Partners, LP (SEP) announced that the board of directors of its general partner declared a quarterly cash distribution to unitholders of $0.485 per unit, an increase of one-half cent over the previous level of $0.48per unit. This is the 19th consecutive quarter that Spectra Energy Partners has increased its quarterly cash distribution. The cash distribution is payable on August 14, 2012, to unitholders of record at the close of business on August 3, 2012. This quarterly cash distribution equates to $1.94 per unit on an annual basis.

Bottom line: SEP has a current dividend yield of 6.01%.  It has an equity summary score of 1.5 out of 10 for a Bearish outlook.

New Dividend Stocks to Watch

Dividend stocks are still in vogue as income investors seek rates in the paltry low interest rate environment.  This has placed a premium on many blue-chip stocks with stable dividends.  The other impact is the number of companies that have initiated a new dividend in the past year.  These companies are starting with lower yields but their payouts indicate they will be raising their dividends in the future.  Here are 3 new dividend payers to add to your watch list for the coming months.

Oiltanking Partners (OILT) is a master limited partnership engaged in independent storage and transportation of crude oil, refined petroleum products and liquefied petroleum gas.  OILT reported first quarter 2012 net income of $15.9 million, or $0.40 per unit on a basic and diluted basis, compared to first quarter 2011 net income of $7.6 million. Adjusted EBITDA increased 21% to $20.2 million for the first quarter of 2012, compared to $16.7 million for the first quarter of 2011.  Revenues increased approximately $4.3 million, or 14.5%, to $34.3 million during the 2012 quarter, mainly attributable to additional revenues from the new storage capacity placed into service in December 2011 and an escalation in storage fees.  Since the completion of the initial public offering in July of 2011, OILT has announced over $200 million of organic growth projects to significantly expand their pipeline connectivity, flexibility and capacity, and acquire nearby land to support our announced expansions.

OILT trades at $32.59 with a market cap of $1.27 billion.  OILT declared a cash distribution for the first quarter of 2012 of $0.35 per unit, or $1.40 per unit on an annualized basis, for an annualized dividend yield of 4.29%.  The increased distribution represents a 2.9% increase over the prior quarter distribution of $0.34 per limited partnership unit.   OILT has a 33% dividend payout ratio so dividends will continue to be increased for this MLP.

Core-Mark (CORE) is one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North America. Core offers a full range of products, marketing programs and technology solutions to approximately 29,000 customer locations in the U.S. and Canada. The company reported March 31 interim earnings of $0.31 versus $0.04 the previous year. The company’s latest interim earnings were above analysts’ expectations. Core-Mark’s earnings for the year 2012 are projected to advance roughly 59%.  We project it will grow with average persistence and at a long term rate of 14%. Its overall financial quality is high versus other firms.

CORE is trading at $49.26 with a market cap of $560 million.  CORE initiated dividend payments on October 2011 with a current dividend yield of 1.39%.  CORE has a dividend payout ratio of 13%. CORE has been upgraded by 5 brokerages in the past month.

Xyratex Ltd (XRTX) provides modular solutions for the enterprise data storage industry and hard disk drive (HDD) capital equipment for the HDD industry.  XRTX has sold off in the previous quarter making it a potential rebound stock.  For the second quarter, GAAP net income was $7.0 million, or $0.24 per diluted share, compared to GAAP net loss of $4.6 million, or $0.15 per share, in the same period last year.  Non-GAAP net income was $9.3 million, or $0.32 per diluted share, compared to non-GAAP net loss of $1.9 million, or $0.06 per share, in the same quarter a year ago.  Gross profit margin in the second quarter was 16.5%, compared to 12.9% in the same period last year.  During the quarter the Company recommenced repurchases of shares under the previously announced share repurchase plan. The Company repurchased 306,353 of its common shares during the quarter at a total cost of $3.6 million.

The board of directors at Xyratex approved a dividend of 0.075 per share. The dividend is payable on August 1, 2012 to shareholders of record on July 19, 2012.  XRTX has increased its dividend 50% since starting payments on August 2011.  XRTX has a dividend yield of 2.77% with a 15% payout.  XRTX has an equity summary score of 9.0 out of 10 for a Bullish Outlook.

The Best MLPs to Own Now

Many of the blue-chip dividend payers are hitting new 52-week price highs.  This is concerning as when price increases, yields will fall.  Because of the soaring popularity of blue-chip dividend payers, more investors are turning to master limited partnerships (MLP).  These are pass-through entities that must pay at least 90% of their taxable income to investors. Many of these issues provide yields double those of blue-chip dividend stocks, and three to four times that of the 10-year Treasury note.

With that in mind, here is a list of MLPs that distribute high dividend yields.  Each company boasts a healthy bottom line already, and should continue to generate income as oil prices rise. As they generate income, so too will their shareholders.

Linn Energy, LLC (LINE), an independent oil and natural gas company, engages in the acquisition and development of oil and gas properties.  The master-limited partnership offers a generous 7.4% yield, with a quarterly distribution of $0.725 per share.  The dividend has increased 9.75% in the past year.  LINE is a best in class upstream MLP.  Distribution growth to accelerate as it integrates acquisitions & develops high-return Granite Wash program.  LINE is positioned to capitalize on acquisition opportunities owing to low commodity price environment.  Accretion from these, which LINE “locks-in” upfront via hedging, should drive LT growth.  LINE is projected to increase EPS by 30% next year.

DCP Midstream Partners, LP (DPM) engages in gathering, compressing, treating, processing, transporting, storing, and selling natural gas in the United States.  The master-limited partnership offers a 6.31% yield, with a quarterly distribution of $0.66 per share.  The dividend has increased 5.6% in the past year.  DPM is a high growth NGL dropdown play.  Entering transformative period, as it will acquire $3b of assets from sponsor.  Dropdowns along with additional organic growth will create integrated NGL midstream platform & drive distribution growth to high-single digits.

NuStar Energy L.P. (NU) engages in the terminalling, storage, and transportation of petroleum products primarily in the United States, Canada, Mexico, the Netherlands, St. Eustatius in the Caribbean, the United Kingdom, and Turkey.  The master-limited partnership offers a generous 8.45% yield, with a quarterly distribution of $1.095 per share.  This is a deep value, turnaround story for this crude oil storage & transport MLP.  NU is sowing the seeds for a recovery in distribution growth to the low-single digits.  We believe the recent increase in organic growth capex is sustainable given the number of low cost, high return project opportunities around its assets.

Enterprise Products Partners L.P. (EPD) provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products, and petrochemicals in the United States, Canada, and Gulf of Mexico.  The master-limited partnership offers a 4.87% yield, with a quarterly distribution of $0.635 per share.  The dividend has increased 6.28% in the past year.  EPD is the largest energy MLP with access to most prolific natural gas, NGL & crude oil plays in US.  Despite its large size, $7.6B of cap ex projects support 5-6% distribution growth per year for next several years with 80% revenues expected to be fee-based by 2013.

Plains All American Pipeline, L.P. (PAA) engages in the transportation, storage, terminalling, and marketing of crude oil, refined products, and liquid petroleum gas (LPG) products in the United States and Canada.  The master-limited partnership offers a 5.09% yield, with a quarterly distribution of $1.065 per share.  The dividend has increased 9.8% in the past year.  PAA is the largest oil transport and storage MLP with a presence in most leading oil shale plays and major storage positions at strategic oil pipeline intersections.  Approximately $5B of organic capex thru 2015 to serve expected increase in US crude production.  Its distributions should grow high single digits the next few years.

High Yield Dividend Stocks With Exploding Earnings

It’s the newest market riddle: where do you go for safety when the traditional option could be in a bubble?  With fiscal problems in Europe once again leading to sharp drops in global stock markets, many investors are seeking out stable assets that can both protect their principal and generate an income stream to keep up with inflation. Yet the most obvious choice – U.S. Treasury bonds – offer historically low yields. The benchmark 10-year Treasury yields 1.90 before taxes, well below the 2.26 percent annual rate of so-called “core” inflation, according to the U.S. Consumer Price index.  Investors should look for stocks offering high dividend yields and growing earnings.

Health Care REIT Inc.’s (HCN) first-quarter earnings jumped 81% as the senior housing and health-care focused real-estate investment trust continued its aggressive expansion.  HCN has been expanding its portfolio of assisted living and skilled-nursing facilities, including its $2.4 billion acquisition last year of Genesis Health Care. The company said it completed $753 million in investments during the latest quarter, including$426 million in medical office building investments, as well as $119 million in senior housing investments.  HCN reported a profit of $57.5 million, or 19 cents a share, up from $31.8 million, or 15 cents a share, a year earlier.

HCN has a dividend yield of 5.3% which are increased 3.5% each year.

Enterprise Products Partners L.P. (EPD) -quarter earnings jumped 49% as net income for the first quarter of 2012 was $656 million versus $435 million for the first quarter of 2011. Net income attributable to limited partners for the first quarter of 2012 was$0.73 per unit on a fully diluted basis compared to $0.49 per unit on a fully diluted basis for the first quarter of 2011.  EPD increased its cash distribution with respect to the first quarter of 2012 to$0.6275 per unit, or $2.51 per unit on an annualized basis, which represents a 5.0 percent increase from the distribution rate paid with respect to the first quarter of 2011. This is the 31st consecutive quarterly increase and the 40th increase since the partnership’s initial public offering in 1998.

EPD has a dividend yield of 5.24% which are increased 5% each year.

Canada’s biggest pipeline company TransCanada Corporation (TRP) announced comparable earnings for first quarter 2012 of $363 million or $0.52 per share. Net income attributable to common shares for first quarter 2012 was $352 million or $0.50 per share.  TRPs Board of Directors also declared a quarterly dividend of $0.44 per common share for the quarter ending June 30, 2012, equivalent to $1.76 per common share on an annualized basis.  While the 1Q earnings were not spectacular, TRP has a number of projects in process to increase future earnings,  Over the next three years, TransCanada expects to complete $13 billion of projects that are in the advanced stages of development – $7.8 billion in oil pipelines, $2.2 billion in natural gas pipelines and $3 billion in energy.

TRP has a dividend yield of 4.11% which were initiated in 2012.

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