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.
This week, investor interest was directed toward companies that increased their dividends. MPLX is first in the list after strong results led to a distribution increase. Pharmaceutical giant Abbvie, which placed second, will up its dividend starting February. Third in the list is oil giant Exxon Mobil, which also upped its payout. Last in the list is car company Ford, the only company from the bunch that had a bad quarter.
Don’t forget to read our previous edition of trends here.
MPLX Increases Distributions to Shareholders
Large fuels logistics operator MPLX (MPLX) has taken the first spot in the list this fortnight, seeing its traffic climb 84%. MPLX, which is organized as a master limited partnership (MLP), increased its distributable cash flow to shareholders by 10% in the third quarter, boosted by strong oil and gas prices and rising demand.
Net income for the quarter came in at $1.43 billion, up from $802 million in the same period in 2021. Of that amount, the company is distributing $1.26 billion to shareholders. MPLX has also succeeded in reducing its debt from 3.7 times EBITDA to 3.5 times. This has inevitably improved stock price performance, with MPLX shares surging more than 200% since an all-time low in 2020.
MPLX’s dividend yields a staggering 9.2%, which is way higher than the energy average. Whether MPLX will continue to pay this dividend very much depends on demand for energy, which could decline given the economic uncertainty.
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AbbVie Raises Dividend
AbbVie (ABBV) has placed second with a viewership increase of 64%. AbbVie has increased its dividend by 5% starting next February, as it beat earnings expectations. AbbVie declared a dividend of $1.48 per share, up from $1.41 previously, payable on February 15 to shareholders of record as of January 13.
Revenues in the third quarter rose 3.3%, with its key cancer drug Humira again driving a large part of the gain. Humira, which is responsible for more than a third of revenues, had strong sales in the U.S., but disappointed internationally, with revenues in the region declining by more than a quarter.
AbbVie confirmed its guidance for the full year, narrowing the range from $13.76 – $13.96 to $13.84 – $13.88 per share.
Exxon Mobil Hikes Dividend on Strong Results
Oil major Exxon Mobil (XOM) has taken the third spot with a jump in traffic of 37%. Exxon has been in the news after another set of strong financial results allowed it to increase its dividend by 3 cents to 91 cents per share.
Exxon reported earnings of $19.7 billion in the third quarter, up from $17.9 billion in the second quarter. Year-to-date, the company reported $30.6 billion in earnings, 200% higher than during the same period last year.
After years of suffering, Exxon was given a respite when oil prices rose due to strong demand, partially attributed to the Russia-Ukraine conflict. Oil prices are being supported by OPEC+’s agreement to cut supply.
The stock has also been strong. Since reaching a multi-year low in March 2020, Exxon shares surged more than 250%.
Ford Motor Slashed Earnings Guidance
Car company Ford Motor (F) is last in the list with an advance in viewership of 31%. Ford was the only company this week to have a bad third quarter. Ford slashed its earnings guidance for the full year after its profits fell in the third quarter. While revenues increased 10% to $39.4 billion, earnings per share declined 41% to 30 cents. The poor results largely stem from supply challenges, which the company warned about in September, and its investment in Argo AI, an autonomous driving company that it is closing down because it believes the technology cannot be profitable in the near future.
For the full year, the company forecasts an EBIT of $11.5 billion, and while that is up 15% compared with 2021, it’s at the low end of its previous forecast of between $11.5 billion and $12.5 billion. Shares in Ford lost a third of their value over the past 12 months.
The Bottom Line
MPLX has increased its distributable cash flow to shareholders after a strong third quarter, driven by high demand for oil and gas. AbbVie has raised its dividend after strong results, although questions remain about its blockbuster cancer drug Humira. Exxon Mobil also increased its dividend following solid earnings, while Ford lowered its earnings guidance due to supply chain challenges.
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