Energy Sector includes businesses engaged in the production and sale of energy products. This includes extraction, manufacturing, refining and distribution. As the world's population increases and third-world countries continue to develop, there will be more intense demand on our finite supply of energy.
We have seen this imbalance manifest itself in the form of higher gasoline and diesel prices, which has resulted in upward price pressure on products or raw materials that have to be transported. According to the U.S. Energy Information Administration (AEO2012 Early Release Overview), crude oil prices will continue their upward ascent. Consider the following chart:
In 2035, the average real price of crude oil in the Reference case is about $145 per barrel in 2010 dollars, or about $230 per barrel in nominal dollars.
Companies with reserves in this sector, including coal and natural gas producers, will only become more valuable as time passes and resources become more scarce. We can complain about the prices, or we can take advantage of them.
This week week, I screened my dividend growth stocks database for energy companies with a yield at or above 3% and have increased their dividends for at least 10 consecutive years. The results are presented below:
Chevron Corporation (CVX) is a global integrated oil company (formerly ChevronTexaco) with interests in exploration, production, refining and marketing, and petrochemicals. The company has paid a cash dividend to shareholders every year since 1912 and has increased its dividend payments for 25 consecutive years. Yield: 3.0%
Questar Corp (STR) is an integrated natural gas holding company is engaged in gas transportation and storage, and retail gas distribution primarily in Utah. Its exploration and production unit was spun off in mid-2010. The company has paid a cash dividend to shareholders every year since 1935 and has increased its dividend payments for 32 consecutive years. Yield: 3.4%
ConocoPhillips Co. (COP), formed via the 2002 merger of Phillips Petroleum and Conoco, is the fourth largest integrated oil company in the world, and second largest in the U.S. The company has paid a cash dividend to shareholders every year since 1934 and has increased its dividend payments for 11 consecutive years. Yield: 3.5%
Magellan Midstream Partners LP (MMP) is engaged in the transportation, storage and distribution of refined petroleum products primarily through its 9,600-mile pipeline system. The company has paid a cash dividend to shareholders every year since 1916 and has increased its dividend payments for 12 consecutive years. Yield: 4.5%
Enterprise Products Partners LP (EPD) is an integrated provider of natural gas and natural gas liquids services, including processing, fractionation, storage, transportation and terminalling. The company has paid a cash dividend to shareholders every year since 1998 and has increased its dividend payments for 14 consecutive years. Yield: 4.9%
Plains All American Pipeline LP (PAA) is a limited partnership that engages in interstate and intrastate crude oil transportation, terminalling and storage, as well as crude oil gathering and marketing. The company has paid a cash dividend to shareholders every year since 1999 and has increased its dividend payments for 12 consecutive years. Yield: 5.2%
Kinder Morgan Energy Partners LP (KMP) is one of the largest pipeline master limited partnerships (MLPs) in the U.S. The company has paid a cash dividend to shareholders every year since 1992 and has increased its dividend payments for 15 consecutive years. Yield: 5.6%
Buckeye Partners LP (BPL) is one of the largest independent U.S. pipeline common carriers of refined petroleum products, with over 6,000 miles of pipeline. The company has paid a cash dividend to shareholders every year since 1987 and has increased its dividend payments for 16 consecutive years. 6.8%
TC PipeLines LP (TCP) has interests in 5,560 interstate natural gas pipelines, including a 46.5% stake in Great Lakes Gas Transmission L.P. The company has paid a cash dividend to shareholders every year since 1999 and has increased its dividend payments for 12 consecutive years. Yield: 6.9%
Nustar Energy L.P. (NS) is a leading independent operator of crude oil and refined products pipelines as well as terminal storage facilities. The company has paid a cash dividend to shareholders every year since 2001 and has increased its dividend payments for 11 consecutive years. Yield: 7.4%
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 210+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long CVX, COP. See a list of all my dividend growth holdings here.
- Four Dividend Stocks Stepping Up In The Downturn
- Increasing Dividend Yield Part VI: Time
- Increasing Dividend Yield Part V: MLPs
- Increasing Dividend Yield Part IV: Bonds
- Increasing Dividend Yield Part III: Preferred Stock
Tags: [CVX] [STR] [COP] [MMP] [EPD] [PAA] [KMP] [TCP] [BPL] [NS]
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