Dividend.com analyzes the search patterns of our visitors each week. By sharing these trends with our readers, we hope to provide insights into what the financial world is concerned about and how to position your portfolio.
Commodities, and especially oil, were in vogue since the start of 2022. Oil and gas infrastructure company Enterprise Products Partners is first on the list, followed by metals miner Rio Tinto. Meanwhile, oil giant Exxon Mobil has taken the last place. Amid these commodity-focused companies, communications giant Verizon has taken the third place.
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Enterprise Products Partners
Oil and gas infrastructure company Enterprise Products Partners (EPD) has taken the first position in the list this week with an advance in viewership of 104%.
Thanks to rising oil and gas prices, which are hovering near multi-year highs, Enterprise Products Partners has increased its payouts to shareholders. For the fourth quarter of 2021, Enterprise Products Partners boosted its cash distribution by 3.3% to $0.465 per unit or $1.86 on an annualized basis. Furthermore, the company also bought back $125 million of its units, increasing the amount of repurchases for the year to $200 million. The company still has 76% of its authorized $2 billion share repurchases.
At the same time, the company has been investing in growth. On January 10, Enterprise Products Partners announced it acquired Texas-based Navitas Midstream, a company owning 1,750 miles of natural gas pipelines in the Permian Basin, for $3.25 billion in cash.
Navitas said it will transport one billion cubic feet of natural gas per day in the first quarter of 2022, when the deal is expected to complete. The deal will also lead to increased returns to shareholders in the next quarters, the company said.
Enterprise Products Partners has a dividend yielding nearly 7.8% per year on a payout ratio of 82%.
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Anglo-Australian iron ore miner Rio Tinto (RIO) has taken the second spot in the list, seeing its viewership surge 67% in the past fortnight. Rio Tinto made the headlines as the company offers a strong dividend yield of more than 10%. It also has an impeccable balance sheet with almost no debt and has been investing heavily in lithium mining as it joins the green revolution.
Just about three weeks ago, Rio Tinto announced the acquisition of Argentina-based Rincon lithium project for $825 million. It said the buyout demonstrates its “commitment to build its battery materials business and strengthen its portfolio for the global energy transition.”
However, Rio Tinto is having some issues with developing its lithium capacity in Serbia. A mine worth $2.4 billion is facing protests from locals who are unhappy with the potential effect on the environment. The Serbian government could soon decide to halt the project.
Shares in Rio Tinto have declined nearly 14% in the last year, giving the company a market capitalization of $162 billion. Rio Tinto’s stock trades at a very low price-to-earnings ratio of just 6.6.
Verizon Communications (VZ) is third in the list with an increase in viewership of 45%.
Verizon, a defensive play paying a bumper dividend yield of 4.7%, has been in the news lately after its effort to launch the so-called C-band spectrum for 5G was halted. The airline industry represented by the Federal Aviation Administration has said the C-band spectrum might interfere with the operations of approximately 50 airports and cause delays. As a result, both Verizon and its rival AT&T (T) agreed to delay the C-band launch by two weeks to put mitigations in place for the airports.
The launch of the C-band will be the beginning of the company’s spectrum upgrade, which investors hope will kick-start growth. With higher download and upload speeds, Verizon investors hope the company can charge more for unlimited data bundles, while also hoping to have more devices per household.
Exxon Mobil (XOM), a regular fixture in our trends, has taken the last place this fortnight, seeing its viewership rise 30%. Exxon Mobil stock has reached highs not seen since before the coronavirus pandemic, thanks to strong demand for fuel and rising oil prices.
Exxon pays out a dividend of $3.50 per share annually, resulting in a yield of 5%. Investors have become more optimistic about the company since it started to be more shareholder-friendly, which includes returning more capital to shareholders and taking steps toward reducing carbon emissions.
The Bottom Line
Enterprise Products Partners is expanding in the Permian Basin with the acquisition of Navitas Midstream. Rio Tinto is trying hard to move away from iron ore mining and toward lithium, but is facing challenges from anti-mining activists. Verizon Communications has again delayed the launch of C-band spectrum for 5G after the aviation industry objected. Finally, Exxon Mobil stock is trading at two-year highs thanks to a more shareholder-friendly strategy and higher oil prices.
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