Chatter Around the World – 134

Chatter Around the World is a curated weekly update of articles related to economics, investing, dividends and personal finance. In these weekly updates, I also capture my blog updates and news related to my portfolio holdings.

Let’s dive into the links that caught my attention this week.

Continue reading

BCE Inc Dividend Increase

BCE Inc

BCE Inc (BCE.TO) announced a 5.0% increase in its cash dividend. The quarterly cash dividend will increase from C$0.65 to C$0.6825 per share and payable on Apr 15, 2016 to shareholders on record as of Mar 15, 2016.

BCE Inc is a Dividend Challenger and this is the 8th consecutive annual dividend increase. The annual dividend rate goes up from C$2.60 to C$2.73. Yield going forward based on today’s closing price is 4.75%.

BCE maintains the dividend payout ratio within its target policy range of 65% to 75% of free cash flow. The higher dividend for 2016 is fully supported by higher expected free cash flow generation driven by continued execution of Bell’s 6 Strategic Imperatives and growing financial contributions from all Bell business segments. Including today’s dividend increase announcement, BCE has increased its annual common share dividend 12 times in the past 7 years, representing an 87% increase.

Our portfolio consists of 40 shares of BCE Inc, which increases our annual dividend from C$104 to C$109.20, an increase of $5.20.

Brookfield Infrastructure Dividend Increase

BIP

Brookfield Infrastructure Partners L.P. (BIP.UN.TO/BIP) announced a 7.55% increase in its cash dividend. The quarterly cash dividend will increase from $0.53 to $0.57 per share and payable on Mar 31, 2016 to shareholders on record as of Feb 29, 2016.

Even though I own the Canadian listed stock (BIP.UN.TO), the dividends are issued in US$, as all financials with Brookfield Infrastructure are in US$-terms. All currency terms used here refer to US$.

Brookfield Infrastructure Partners is a Dividend Challenger and this is the 9th consecutive annual dividend increase. The annual dividend rate goes up from $2.12 to $2.28. Yield going forward based on today’s closing price is 6.58%.

From the press release statement:

“After a good year in 2015, our business is well positioned to prosper in 2016. Our operations are performing well, our balance sheet is strong and we have almost $3 billion of liquidity,” said Sam Pollock, CEO of Brookfield Infrastructure. “With our unique internally generated organic growth and ability to recycle capital, we will continue to generate steady, predictable growth. We are also enthusiastic about the potential for value based transactions in Brazil and North American energy infrastructure in the years ahead that would be highly profitable for the business.”

Our portfolio consists of 35 shares of Brookfield Infrastructure Partners LP, which increases our annual dividend from $74.20 to $79.80, an increase of $5.60.

Is Chevron Dividend Safe?

Chevron Small

Chevron Corp (CVX) is one of the largest oil & gas companies in the world. The company has a market cap of $160B and is an energy behemoth that operates in upstream and downstream businesses.

Last week, the company reported quarterly earnings of -$0.31 on a revenue of $29.25B, which is down 36.6% YoY. Its the first quarter that Chevron had such a huge loss in the past 13 years. While investors were expecting a bad quarter (and a bad year) from Chevron, it was still better than expected as the revenue beat the expectations. The company also announced a quarterly dividend of $1.07, which is what it has paid since Q2 2014.

The media lit up with news from Oppenheimer analyst Fadel Gheitpredicting a dividend cut from Chevron in the coming quarters as he predicts that the company is on an unsustainable path of borrowing funds to pay the dividends.

Continue reading

Archer Daniels Midland Dividend Increase

Archer Daniels Midland

Archer Daniels Midland (ADM) announced a 7.14% increase in its cash dividend. The quarterly cash dividend will increase from $0.28 to $0.30 per share and payable on Mar 8, 2016 to shareholders on record as of Feb 16, 2016.

Archer Daniels Midland is a dividend champion and this is the 41st consecutive annual dividend increase. The annual dividend rate goes up from $1.12 to $1.20. Yield going forward based on today’s closing price is 3.71%.

From the press release statement:

Juan Luciano, ADM chairman and CEO said “In 2016, our balanced capital allocation framework remains a priority, including a quarterly dividend rate increase of 7 percent to $0.30 per share, and share repurchases of between $1.0 billion and $1.5 billion, subject to strategic capital requirements. With a strong balance sheet, we will also remain opportunistic for investments, especially bolt-ons, in this more challenged macro environment.”

Our portfolio consists of 80 shares of Archer Daniels Midland, which increases our annual dividend from $89.60 to $96.00, an increase of $6.40.