Scottrade FRIP Purchases – April 2016

I have been making Scottrade FRIP purchases at the beginning of each quarter for a few quarters now. My last quarter purchases was little over $550.00. This quarter, my purchases ended up being higher at $677.08. The following are the FRIP purchases I made on 4/4/2016.

Scottrade FRIP Purchases – January 2016

I have been making Scottrade FRIP purchases at the beginning of each quarter for a few quarters now. My last quarter purchases was little over $660.00. This quarter, my purchases ended up being lower at $554.40. The following are the FRIP purchases I made on 1/4/2016.

Dividend Cut – KMI

It is finally here… I was expecting this for a while now and it is finally here. KMI announced a 75% dividend cut yesterday (from quarterly dividend of $0.51/share to $0.125/share). It was a long time coming. I own 54 shares in KMI and this reduces my projected annual dividends by $83.16. Ouch.

Not sure what is going to happen with other related stocks that I hold – CVX, BBL, BP, COP, NOV and BBL. Of the above list, the yields of NOV and BBL are really high and unsustainable. Need to wait and see what happens.

My new projected annual dividends stands at $3,231.37 now.

Two contrasting Dividend Increases

Two companies that I hold positions increased the dividends this week. The dividend increases were contrasting and in opposite sides of the spectrum.

• Procter & Gamble Co (PG) announced a 3% increase to a quarterly dividend of $0.6629 compared to the previous quarterly dividend of $0.6436. The increase represents a projected annual dividend of $2.5744 which results in 3.12% forward yield. While this is a nice yield, PG has been struggling recently due to slowing or retracting growth and currently headwinds. While dividends have been increased each year and PG maintains its dividend champion status, the payout ratio has been increasing too due to lack of EPS growth. This is a real concern and doesn’t leave much room for future dividend growth without EPS growth coming back. The stock is also priced higher right now at a P/E of over 21. I am looking forward to seeing the quarterly results to be announced next week.
• Kinder Morgan Inc (KMI) also announced an increase this week. The quarterly dividend increased to $0.48 compared to the previous quarterly dividend of $0.45. This results in an increase over 6%. The quarterly results were mixed, but the dividends were easily covered by the earnings. The current quarterly dividend of $0.48 results in a good 4.37% yield. But, the company also reaffirmed its target of $2.00 in annual dividends in 2015 which means more dividend increases on the way for the next two quarters.

Disclosure: Long on both stocks mentioned above.