Pengrowth Energy Corp. (PGH)
Dividend Yield: 8.7%
Pengrowth Energy Trust is a Canadian energy trust with crude oil and natural gas properties in the Western Canadian Sedimentary Basin and offshore the East Coast of Canada.
In the second quarter, Pengrowth earned $88.5 million in net income or 27 cents of net income per share, an increase from $18.2 million or six cents the same period the previous year. The company paid a 7-cent dividend per month, for a total of 21 cents per share. In total, it paid $68.8 million for dividend payments, an increase from $61.1 million the previous year. Its payout ratio is relatively high at 45% and has increased from 35% the previous year.
Pengrowth’s board of directors regularly reviews the level of dividends it pays based on a number of factors and does not guarantee the yield rate or that it will pay at all. The dividend has greatly fluctuated over the years, and the current 7-cent distribution is its lowest since 1994.
Pengrowth saw considerable decreases in average daily production in almost all of its resources during the quarter, due primarily to pipeline outages, extended maintenance and extreme weather. The decline was muted by increased commodity prices.
Over the long term, the company’s revenue grew steadily from 2002 to 2008, then fell to $1.1 billion in 2009, but increased again to $1.3 billion in 2010. After six years of growth, EBITDA fell from $1.3 billion in 2008 to $772 million in 2009, and rose again to $888 million in 2010.
Exterran Partners L.P. (EXLP)
Dividend Yield: 8.6%
Exterran Partners L.P. was formed by Exterran Holdings to provide natural gas contract operations services to customers throughout the United States. Exterran Holdings indirectly owns a majority interest in Exterran Partners. Exterran Holdings, Inc. is a global market leader in full service natural gas compression and a premier provider of operations, maintenance, service and equipment for oil and gas production, processing and transportation applications. Exterran Holdings serves customers across the energy spectrum, from producers to transporters to storage owners.
Exterran Partners released second-quarter 2011 financial results compared to second quarter 2010 results on Aug. 4, 2011. Net revenue increased to $71.8 million from $53.8 million. The results reflected weak performance in international markets which offset improvements in their business in North America. Distributable cash flow totaled $19.0 million for the second quarter 2011, compared to $12.8 million for the second quarter 2010.
The company’s dividend has grown each year since 2007, from $1.378 to $1.855 in 2010. The company’s revenue has growth from 2008 to 2010, and earnings per share decreased each year since 2008, from $2.34 to a loss of 85 cents. Gross, operating and net margins have also decreased each year since 2008. In 2009 and 2010, it had negative income attributable to Exterran stockholders, indicating that the dividend might not be secure.
YPF S.A. ADS (YPF)
Dividend yield: 8.6%
YPF Sociedad Anonima is an international energy company, based on the integrated business of hydrocarbons, focalized in Latin America, with high standards of efficiency, profitability and responsibility. They have a dominant position in Argentina's exploration, production, refining and marketing sectors, as well as a growing presence in petrochemicals.
YPF has had fairly stable revenue, which fluctuated each year from $9.2 billion in 2007 to $11.1 billion in 2010. Net income has also varied significantly from $1.3 billion and $1.5 billion over the same time span. Dividends have been even more wavering. In 2007 the company paid $1.93, in 2008 $7.37, in 2009 $3.31 and in 2010 $2.88. Its payout is rather sporadic and does not occur every quarter.
In 2010, the company increased its cash by $382 million pesos to $2.5 billion pesos. Its main uses of cash in investing and financing involved acquisitions and dividend payments. It pays out 90% of its net income to dividends.
YPF contains some risk by being based virtually entirely in Argentina, a country with a somewhat volatile economic history. In 2009 the country’s GDP growth rate fell to .9% and jumped to 9% in 2010. The company also faces extensive government regulations. For instance, the company could not meet all of its export commitments last year due to restrictions imposed by the Argentine government and must reduce export volumes.
Pioneer Southwest Energy Partners L.P. (PSE)
Dividend Yield: 8%
Pioneer Southwest Energy is a Delaware limited partnership formed by Pioneer Natural Resources Company to own producing oil and gas properties in the Spraberry field in the Permian Basin of West Texas and to acquire producing oil and gas assets in its area of operations. This area includes onshore Texas and eight counties in the southeast region of New Mexico.
In the second quarter 2011, Pioneer Southwest increased averaged production 4% compared to the same period the previous year and added 9 wells on production (20 year to date). Revenue increased to $54.5 million from $44.3 million, and net income declined to $53 million from $55.2 million.
Pioneer Southwest has had stable annual revenue, growing each consecutive year from 2006 to 2010. Earnings per share has fluctuated over the last five years, from 92 cents in 2009 to $3.19 in 2010, with $1.55 in the training 12 months. Free cash flow has declined over the last five years due in large part to increased capex.
At the end of 2010, the company had no cash and cash equivalents besides $19 million in short-term investments. The Partnership Agreement requires that, within 45 days after the end of each quarter, the Partnership distribute all of its available cash quarterly. The term “available cash,” for any quarter, means the Partnership’s cash on hand, including cash from borrowings, at the end of a quarter after the payment of expenses and the establishment of cash reserves for future capital expenditures, operational needs and distributions for any one or more of the next four quarters. Its payout ratio is 69$. Long-term debt and liabilities at the end of 2010 stood at $124 million.
The dividend remained at 50 cents from the third quarter of 2008 to the fourth quarter of 2010, when the company bumped it up one cent to 51 cents per quarter. The sustainability of the distribution is supported by: their drilling program, the strong liquidity and financial position, significant derivative position at attractive prices and future acquisitions.
Boardwalk Pipeline Partners (BWP)
Dividend Yield: 8%
Boardwalk Pipeline Partners LP is a master limited partnership engaged through its subsidiaries, Texas Gas Transmission, LLC and Gulf South Pipeline Company, LP, in the interstate transportation and storage of natural gas. Boardwalk’s general partner is Boardwalk GP, LP, which is 100% indirectly owned by Loews Corporation.
The company released its second quarter results on August 1.It had operating revenues of $262 million, a 2% increase from $256.7 million the same quarter the previous year. Distributable cash flow was $88.4 million, a 21% increase from $112 million.
Over the past five years, Boardwalk’s revenue has increased each consecutive year since 2005, reaching $1.1 billion in 2010. Likewise, EBITDA has increased each consecutive year over the same time span. Its margins have been fairly stable as well. It had losses from 2007 to 2009, but recovered to have free cash flow of $269 million in 2010.
Boardwalk Pipeline has increased its dividend every quarter since the fourth quarter of 2005. For 2010, it was $2.05, up from $1.97 in 2009. The company’s cash distribution policy is to distribute its “available cash” on a quarterly basis, although it can change the policy at any time. Its payout ratio is 144%.
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