Worth Watching Stocks – Plains All American Pipeline, L.P. (NYSE:PAA), DiamondRock Hospitality Company (NYSE:DRH)
Many investors think of dividend-paying companies as boring, low-return investment opportunities. Compared to high-flying small cap companies, whose volatility can be pretty exciting, dividend-paying stocks are usually more mature and predictable. Though this may be dull for some, the combination of a consistent dividend with an increasing stock price can offer earnings potential powerful enough to get excited about. Once a company makes a profit, management must decide on what to do with those profits. They could continue to retain the profits within the company, or they could pay out the profits to the owners of the firm in the form of dividends.
Once the company decides on whether to pay dividends they may establish a somewhat permanent dividend policy, which may in turn impact on investors and perceptions of the company in the financial markets. What they decide depends on the situation of the company now and in the future. It also depends on the preferences of investors and potential investors. The good part about the dividend growth strategy is that investors receive cash in their brokerage accounts from their dividend paying stocks. This allows them to have the necessary resources available for opportunities present during recessions for example.
The following stocks have raised dividends each year for several years in a row.
Plains All American Pipeline, L.P. (NYSE:PAA) traded 2,761,087 shares on last trading session with closing price of $25.65.
PAA was trading -24.45% below its 52-week high and 3.01% above its 52-week low. Its last 5-Year EPS growth stands at -29.30%; with earnings growth of 663.20% yoy. The stock stands -10.98% below the average-price of 50 days and -4.93% compared with the SMA 20.
The stock has a 1-year performance down -6.76% and a negative weekly performance at -2.58%. Moreover, the stock is down -5.84% in one month through last close, to $25.65, showing a -18.13% return during the past three months. The company is set at a mean analysts’ recommendation of 2.40.
PAA has been paying dividends since 1999 and has raised their dividend for 0 consecutive years. It has a dividend yield of 8.60% and a 5 year dividend growth rate of 3.56%. Their payout ratio is 250.00%.
DiamondRock Hospitality Company (NYSE:DRH) shares moved to $11.54 after opening the day at $11.42, on Friday. The stock floated in a price range of $11.39 to $11.75, with market capitalization of $2.35B. The stock exchanged hands with 2,637,967 shares higher as compared to its average daily volume of 2.28M shares. If we take a look on its volatility, 2.33 percent was seen in a week and for the month it was 1.99 percent.
The company’s net profit margin stands at 12.20% whereas its return on equity (ROE) is 5.80%. It has 200.27M of outstanding shares and its shares float measured at 197.38M. The average analysts gave this company a mean recommendation of 2.70.
DRH first paid dividend in 2005 and has increased their dividend for 5 straight years. They have a dividend yield of 4.30% and a 5 year dividend growth rate of 5.57%.