6 Dividend Stocks Increasing Payouts – EPD PNC WSO OZRK TEP TEGP

EPD and PNC were among the notable dividend stocks raising their payouts

The S&P 500 Index pulled back this week as investors were spooked by a rise in global sovereign bond yields and the potential for tighter monetary stimulus going forward. Despite the volatility and potential for higher interest rates, a number of companies demonstrated confidence in their operations by announcing fresh dividend increases.

Six notable dividend stocks increased their payouts over the previous week, including two banks, three energy companies and an industrial distributor.

Here are six dividend stocks increasing payouts.

Enterprise Products Partners L.P. (NYSE:EPD) announced a 1.2% increase to its quarterly dividend, raising it from 41.5 cents per share to 42 cents. Dividends will be paid from the provider of midstream energy services on Aug. 7 to shareholders of record as of July 31. PNC shares become ex-dividend on July 27.
EPD Dividend Yield: 6.27%

PNC Financial Services Group Inc (NYSE:PNC) raised its quarterly dividend by 36%, increasing it from 55 cents per share to 75 cents. The diversified financial services company will pay its higher dividend to shareholders of record as of July 17 on Aug. 7. PNC shares will trade ex-dividend on July 13.
PNC Dividend Yield: 2.38%

Watsco Inc (NYSE:WSO) increased its quarterly dividend by 19%, raising its payment to $1.25 per share from $1.05. Shareholders of record as of July 17 will receive dividends from the distributor of heating and cooling equipment on July 31. The company’s shares will go ex-dividend on July 13.
WSO Dividend Yield: 3.22%

Bank Of The Ozarks Inc (NASDAQ:OZRK) grew its quarterly dividend from 17.5 cents per share to 18 cents, representing a raise of 3%. The retail and commercial banking company will pay out its higher dividends to shareholders of record as of July 14 on July 21. OZRK shares trade ex-dividend on July 12.
OZRK Dividend Yield: 1.51%

Tallgrass Energy Partners LP (NYSE:TEP) moved its quarterly dividend higher by 11%, increasing it by from 83.5 cents per share to 92.5 cents. The operator of midstream energy assets will pay its higher dividend to shareholders of record as of July 28 on Aug. 14. TEP shares are expected to trade ex-dividend on July 26.
TEP Dividend Yield: 7.35%

Tallgrass Energy GP LP (NYSE:TEGP) increased its quarterly dividend by 19%, raising its payment to 34.25 cents per share from 28.75 cents. Shareholders of record as of July 28 will receive their higher dividends on Aug. 14 from the owner of crude oil and natural gas transportation and logistics assets. TEGP shares will be ex-dividend on July 26.
TEGP Dividend Yield: 5.50%

By Brian Bollinger

Source: https://goo.gl/CeYTpC

8 Takeaways From Warren Buffett's Annual Letter To Berkshire Shareholders

Warren Buffett released his annual letter to Berkshire Hathaway Inc. (NYSE: BRK-A)(NYSE: BRK-B) shareholders on Saturday morning.

Buffett, as usual, spent a significant portion of the letter updating shareholders on the firm's current holdings, its annualized returns and other bits of wit and wisdom.

Click here to read the full letter.

See Also: Buffett's Bucket List Buys: The Oracle Making Unexpected Plays Late In The Game

On what they accomplished:

"Berkshire’s gain in net worth during 2016 was $27.5 billion, which increased the per-share book value of both our Class A and Class B stock by 10.7%. Over the last 52 years... per-share book value has grown from $19 to $172,108, a rate of 19% compounded annually."

On what they hope to accomplish:

"Charlie and I have no magic plan to add earnings except to dream big and to be prepared mentally and financially to act fast when opportunities present themselves. Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do."

On American economic prosperity:

"Early Americans...were neither smarter nor more hard working than those people who toiled century after century before them. But those venturesome pioneers crafted a system that unleashed human potential, and their successors built upon it.
"This economic creation will deliver increasing wealth to our progeny far into the future. Yes, the build-up of wealth will be interrupted for short periods from time to time. It will not, however, be stopped. I’ll repeat what I’ve both said in the past and expect to say in future years: Babies born in America today are the luckiest crop in history."

On share repurchases:

"In the investment world, discussions about share repurchases often become heated. But I’d suggest that participants in this debate take a deep breath: Assessing the desirability of repurchases isn’t that complicated. From the standpoint of exiting shareholders, repurchases are always a plus. Though the day-to-day impact of these purchases is usually minuscule, it’s always better for a seller to have an additional buyer in the market... My suggestion: Before even discussing repurchases, a CEO and his or her Board should stand, join hands and in unison declare, “What is smart at one price is stupid at another."

On insurance, Berkshire's most important sector:

"[O]ur P/C (Property/casualty) companies have an excellent underwriting record. Berkshire has now operated at an underwriting profit for 14 consecutive years, our pre-tax gain for the period having totaled $28 billion. That record is no accident: Disciplined risk evaluation is the daily focus of all of our insurance managers, who know that while float is valuable, its benefits can be drowned by poor underwriting results. All insurers give that message lip service. At Berkshire it is a religion, Old Testament style."

On company management:

"Charlie and I cringe when we hear analysts talk admiringly about managements who always “make the numbers.” In truth, business is too unpredictable for the numbers always to be met. Inevitably, surprises occur. When they do, a CEO whose focus is centered on Wall Street will be tempted to make up the numbers."

On Berkshire's ownership of $5 billion of preferred stock issued by Bank of America BAC 1.42%:

"This stock, which pays us $300 million per year, also carries with it a valuable warrant allowing Berkshire to purchase 700 million common shares of Bank of America for $5 billion at any time before September 2, 2021. At yearend, that privilege would have delivered us a profit of $10.5 billion. If it wishes, Berkshire can use its preferred shares to satisfy the $5 billion cost of exercising the warrant... Many of our investees, including Bank of America, have been repurchasing shares, some quite aggressively. We very much like this behavior because we believe the repurchased shares have in most cases been underpriced. (Undervaluation, after all, is why we own these positions.) When a company grows and outstanding shares shrink, good things happen for shareholders."

On investment advice:

"My regular recommendation has been a low-cost S&P 500 index fund. To their credit, my friends who possess only modest means have usually followed my suggestion. I believe, however, that none of the mega-rich individuals, institutions or pension funds has followed that same advice when I’ve given it to them. Instead, these investors politely thank me for my thoughts and depart to listen to the siren song of a high-fee manager or, in the case of many institutions, to seek out another breed of hyper-helper called a consultant. That professional, however, faces a problem....

"Long ago, a brother-in-law of mine, Homer Rogers, was a commission agent working in the Omaha stockyards. I asked him how he induced a farmer or rancher to hire him to handle the sale of their hogs or cattle to the buyers from the big four packers (Swift, Cudahy, Wilson and Armour). After all, hogs were hogs and the buyers were experts who knew to the penny how much any animal was worth. How then, I asked Homer, could any sales agent get a better result than any other? Homer gave me a pitying look and said: “Warren, it’s not how you sell ‘em, it’s how you tell ‘em.” What worked in the stockyards continues to work in Wall Street."

By Jason Shnubnell

Source: https://www.benzinga.com/general/movers-shakers/17/02/9096828/8-takeaways-from-warren-buffetts-annual-letter-to-berkshire-sha

Warren Buffett loves cheap airline stocks, which could get a boost from Trump

Airlines already have low valuations, so if tax rates fall, they could be even more attractive


President Donald Trump’s corporate tax plan could increase the profitability of airlines, which would enrich Warren Buffett and other airline investors.

The decision by Warren Buffett’s Berkshire Hathaway to load up on Apple shares is making big news. But the billionaire investor also put money in four airline stocks.

A tailwind for airlines is that their high income tax rates might fall dramatically if President Donald Trump succeeds in cutting corporate tax rates.

In the fourth quarter, Berkshire Hathaway Inc. BRK.B, -0.05%  built a new stake of 43.2 million shares in Southwest Airlines Co. LUV, +3.58% while also adding to its holdings of American Airlines Group Inc. AAL, +2.08% Delta Air Lines Inc.DAL, +2.63%  and United Continental Holdings Inc. UAL, +2.73% Most airlines are expected by analysts to post declining profits in 2017 as fuel prices rise. Industry profits are expected to be healthy in 2018, with those four airlines expected to generate double-digit increases in earnings per share.

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Tax rates

FactSet estimates that the average effective income tax rate over the past 12 reported months for S&P 500 SPX, +0.50%   member companies was 26.4%. The highest U.S. corporate tax rate is 35%, and, of course, many companies pay state and local income taxes as well. It is reasonable to argue that a reduction in the federal corporate tax rate will help some companies more than others, and airlines might be among the biggest beneficiaries.

 

A Harvard Business professor explains Donald Trump

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Harvard Business School Professor Clayton Christensen developed the famous "jobs to be done" theory to explain consumer behavior. He talked to MarketWatch about how his jobs-to-be-done theory can also explain Donald Trump's rise to power.

We decided to broaden our review by looking at the nine airlines included in the S&P 1500 Composite Index, which is made up of the S&P 500, the S&P 400 Mid-Cap Index MID, +0.29%  and the S&P Small-Cap 600 Index SML, +0.55%

Here they are, in alphabetical order, with their effective income tax rates:

Airline	Ticker	Effective income tax rate - 2016*
Alaska Air Group Inc.	ALK, +0.69%	39.48%
Allegiant Travel Co.	ALGT, +0.00%	36.53%
American Airlines Group Inc.	AAL, +2.08%	37.75%
Delta Air Lines Inc.	DAL, +2.63%	34.10%
Hawaiian Holdings Inc.	HA, +0.10%	37.95%
JetBlue Airways Corp.	JBLU, +0.45%	37.58%
SkyWest Inc.	SKYW, +3.57%	39.37%
Southwest Airlines Co.	LUV, +3.58%	36.74%
United Continental Holdings Inc.	UAL, +2.73%	40.74%
Source: FactSet

(For SkyWest Inc. SKYW, +3.57% we are showing the effective income tax rate for 2015, because the company posted an operating loss for 2016.)

Trump has pledged to lower the corporate tax rate to 15%. He said Feb. 9 that his administration would be “announcing something I would say over the next two or three weeks” on corporate taxes that “will be phenomenal” for businesses.

Valuation

The S&P 1500 trades for 16.2 times consensus 2018 earnings estimates, according to FactSet, while the industrial sector of the index (which includes the airlines) trades for 16.8 times consensus 2018 estimates. Here’s how the airlines stack up, by this measure, and how much analysts expect their earnings to grow in 2018:

Airline	Ticker	Consensus EPS estimate - 2017	Consensus EPS estimate - 2018	Expected EPS growth - 2018	Closing price - Feb. 14	Price/ consensus 2018 EPS estimate
Alaska Air Group Inc.	ALK,+0.69%	$7.89	$8.61	9%	$96.30	11.2
Allegiant Travel Co.	ALGT,+0.00%	$10.96	$12.49	14%	$174.85	14.0
American Airlines Group Inc.	AAL,+2.08%	$4.61	$5.35	16%	$46.57	8.7
Delta Air Lines Inc.	DAL,+2.63%	$5.23	$5.79	11%	$49.86	8.6
Hawaiian Holdings Inc.	HA,+0.10%	$4.83	$5.02	4%	$51.10	10.2
JetBlue Airways Corp.	JBLU,+0.45%	$1.82	$2.01	10%	$19.66	9.8
SkyWest Inc.	SKYW,+3.57%	$3.09	$3.47	12%	$35.05	10.1
Southwest Airlines Co.	LUV,+3.58%	$3.89	$4.68	20%	$55.31	11.8
United Continental Holdings Inc.	UAL,+2.73%	$6.77	$8.11	20%	$73.74	9.1
Source: FactSet

It appears from these low forward price-to-earnings ratios that many investors still don’t trust airlines, but the industry has been stable in recent years, as it has found new ways to make money and avoid cutthroat price competition, following decades of mergers, bankruptcies and other disruptions.

Erick Ormsby, the founder of Alcosta Capital Management, particularly favors Southwest Airlines because of the prospect that its high tax rate will fall, as well as 20% expected EPS increase in 2018 and its overall growth trajectory.

“You have a stable environment, relatively speaking, for an airline that is trading at 12 times earnings,” he said in an interview Feb. 14.

By Philip Van Doorn

Source: http://www.marketwatch.com/story/warren-buffett-loves-cheap-airline-stocks-which-could-get-a-boost-from-trump-2017-02-15