The first two months of the year is the time of earnings announcement of many companies. What follows soon after is an announcement of dividend increases. This is the update that investors look forward to as this will not only increase their value but will also reassure them that the company that they placed their bets on are doing quite well. Three companies announced dividend increases recently. Read on to know more about them:
Outperforming despite sectorial slump
It is not many times that we see a company perform well, when its direct or related sector is performing badly. Kinder Morgan (KMI, Financial) is an exception to this rule. In the backdrop of crude oil prices crumbling badly, one would have expected companies in the oil and energy sector too, to fare badly. Not Kinder Morgan, though. Being the biggest energy infrastructure company in America, KMI is currently in a very healthy situation in terms of finance. Revenues went up to 15% during 2014 from last year and it also has a comfortable cushion of free cash flow for this year; hence investors can be assured that Kinder Morgan will have a good year for 2015 as well. Recently the company announced a 2% increase in its quarterly dividend. Now investors will receive $0.45per share as quarterly dividends from Kinder Morgan. With a diverse portfolio like pipelines and oil, fuel, coal, crude oil and carbon dioxide storage businesses, the company is all set to have a steady year which will not be impacted much by the oil price slump. The free cash flow per share and stock movements of Kinder Morgan are shown below:
Sand production business
Emerge Energy Services (EMES, Financial) is another company that has done well despite being directly related to the oil commodity. The sand production and fuel processing cum distribtuion major has witnessed continuous earnings last quarter because its sand production unit has been doing well. This ensures that Emerge is absolutely safe for the next few quarters, at least with respect to its revenue(10%increase from Q3 to Q4 2014, to show $296million) and EBITDA (earnings before interest, tax, depreciation and amortization) (44%increase from Q3 to Q4 2014, to show $37 million). However, Emerge could take a backseat if oil prices don’t recover in the long run. With this long term challenge ahead, Emerge announced a 2% increase in its quarterly dividends per share, which now stands at $1.41. Earnings and share price trend of Emerge are shown below:
Sky-high raise from an airline
In terms of rate of increase in dividends, Alaska Air Group’s (ALK, Financial) has got to be the best. The airline recently announced a whopping 60% increase in its quarterly dividend per share, which now stands at $0.20 per share. This group is all set to lose its brand name soon as it will be merged with another major, Delta airline (DAL, Financial) sometime during this year. Due to this consolidaiton activitiy, Alaska Air has reported yet another great year. The company had started to pay out dividends only from October 2013 onwards. During Q4 2014, the company reported $125million adjusted net income as against $77million during the same period last year. Full year bottom line for 2014 was an impressive $571million as against $383 during 2013. Passenger revenue segment had reported a 9% increase from last year. The year 2015 will see newer routes from Alaska Air in the Northwest, thereby leading to increased earnings and free cash flow. Dividend and share price movement of the group can be seen from the below charts:
Conclusion
With these recent incresaes in quarterly dividends, these companies have proved that they are on the right track of progress. Through this move, investors are assured that they have put their money in the right place. Investor confidence is one of the great assets of a company and going by the current records, these three companies enjoy a very good reputation among their investors.
