Halliburton Company (HAL), Kinder Morgan Inc (KMI), American Electric Power Company, Inc. (AEP): Three Energy Companies Open Their Wallets Wider to Shareholders

Page 1 of 2

Halliburton CompanyThere is no shortage of research that points to the fact that companies that pay a dividend outperform non-payers. That same research will point out that those companies that can grow their payout are even more likely to outperform. With that as a backdrop, let’s take a look at three energy companies that recently opened up their wallets.

Serving oilfields yields great returns
Oil-field service company, Halliburton Company (NYSE:HAL) earlier this year boosted its dividend by 39%. It also announced that it plans to lock dividend payments in at 15%-20% of its net income going forward. That big boost has pumped the company’s yield to 1.25%.

The dividend boost is just part of the story here, as Halliburton Company (NYSE:HAL) began a systematic share repurchase program under its authorized $1.7 billion buyback plan. Along with earnings, the company reported that it had already bought back 1.2 million shares for $50 million. Since it started buying back shares in 2006, Halliburton Company (NYSE:HAL) has returned $3.3 billion to shareholders by repurchasing 97 million shares.

Despite on-going Macondo litigation from the BP oil spill, the company has a rock solid balance sheet. Halliburton Company (NYSE:HAL)’s confidence in maintaining this dividend policy is buoyed by peer-leading results, and expectations of continued growth both in North America and internationally. If you take look at these two together, Halliburton Company (NYSE:HAL) has a long runway of future outperformance ahead of it.

Keeping it in the family
Last week, the Kinder Morgan Inc (NYSE:KMI) family of companies including Kinder Morgan Energy Partners LP (NYSE:KMP) and El Paso Pipeline Partners, L.P. (NYSE:EPB), all announced distribution hikes. Kinder Morgan Inc (NYSE:KMI) boosted its dividend by 19% over last year’s first quarter payout based on strong results from Kinder Morgan Energy Partners LP (NYSE:KMP), with some help from El Paso Pipeline Partners, L.P. (NYSE:EPB). Those two partnerships announced year-over-year payout increases of 8% and 22%, respectively.

Don’t expect these pay raises to stop anytime soon. Kinder Morgan Energy Partners LP (NYSE:KMP) has an organic growth pipeline of more than $12 billion in projects to keep it busy over the next five years, while El Paso Pipeline Partners, L.P. (NYSE:EPB) has a number of drop-down opportunities from Kinder Morgan Inc (NYSE:KMI), as well as the potential to participate in the LNG export market. As these projects come online, they’ll drive further distribution growth across the family.

It’s electric
While some of its peers in the utility space are slashing payoutsAmerican Electric Power Company, Inc. (NYSE:AEP) actually hiked its dividend by 4.3% this quarter. CEO Nicholas Akins noted that, “This change reflects our continued commitment to increase shareholder value and achieve payout ratios that are in line with our regulated peers.” Commitment is one thing, but it’s the company’s growing assets that are really driving the increased payout.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!