Value Investing News

The latest 10-K filing by El Paso Pipeline Partners, L.P.

Several companies announced their intent to increase distributions to shareholders. I have separated the dividend raisers of the past week in three groups: dividend achievers, champions and aristocrats; master limited partnerships; and potential dividend achievers

Most casual income investors focus on current yield, which is important. However, if your objective is to build a portfolio of securities with increasing income, then Yield on Cost is an excellent metric to measure your progress.

Dividends from a quality, well-diversified portfolio are much more predictable than capital gains and good companies routinely raise their dividends well in excess of the inflation rate.

This week’s distribution increases were mainly focused on two of the energy majors and several master limited partnerships. In one occasion with master limited partnerships both the general and the limited partners received distribution increases, while in another only the general partners received a raise in quarterly distributions.

Checking the pulse of dividend increases is an exercise whose goal is to uncover potential dividend growth plays that I might have otherwise missed out on. Another reason for that is to refute the idea that dividend investing is dead. It is also interesting to look for trends in the data, while browsing through the list of dividend increasers.

The main focus of dividend investing is finding and buying stocks that will continue to raise their dividends in the future. In making this determination there are many factors to consider such as dividend payout ratio, debt levels, the company’s dividend policy and track record.