Dividend.com analyses 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.
Telecommunication towers operator SBA Communications has taken the first place in the list this week, as the company raised its dividend following solid quarterly results. PDC Energy is second in the list, after the company announced plans to return more cash to shareholders. Department store operator Kohl’s has taken the third spot as the company is fighting an activist investor. Hess, another energy company, closes the list.
Don’t forget to read our previous edition of trends here.
SBA Communications
SBA Communications (SBAC), one of the U.S.’s largest telecom towers operators, has taken the first position in the list with an increase in viewership of 1,375% over the past fortnight. SBA, a real estate company that is believed to operate the best assets in wireless infrastructure, increased its quarterly dividend by 22% in the fourth quarter. The cash will be paid on March 25 to shareholders of record as of March 10.
The company’s AFFO (adjusted funds from operations) has jumped 13.3% in the fourth quarter ended December 31, 2021, with total revenue up 11.1% to $595.3 million. During the quarter, SBA repurchased 1.8 million shares. SBA management said the company has benefitted from robust investment plans in 5G from its customers, which include AT&T, Verizon, and T-Mobile. During the quarter, the company also expanded its operations in Tanzania and the Philippines. Meanwhile, it also acquired 59 communications sites and developed 88 towers to increase the number of its communication sites to 34,177.
SBA’s dividend yields just 0.85% per year, which compares poorly with the 4.4% for the real estate average. However, the company has rewarded investors with strong stock price appreciation. Shares in SBA have surged more than 180% over the past five years.
Check out our latest Best Dividend Stocks List here.
PDC Energy
PDC Energy (PDCE) has taken the second place in the list with a rise in viewership of 1,300%. PDC, a $6.7 billion market capitalization company, recently announced the acquisition of Great Western Petroleum for $1.3 billion, including debt.
The buyout will be financed with cash on hand and the issuance of four million shares. Concurrently with the acquisition, PDC increased its quarterly base dividend by more than 100% to $0.25 per share. The dividend will be further increased when the transaction is completed.
In addition, PDC committed to returning at least 60% of its free cash flow to shareholders via share repurchases and special dividends.
PDC seems to be doing the right thing, as its payout ratio is just 7.7% and there is room for it to be increased. Its dividend also yields 1.4%, way lower than the energy average yield of 4.2%.
Kohl’s
Kohl’s (KSS) has taken the third position in the list with an advance in viewership of 722%.
Kohl’s stock has declined more than 10% after the company revealed its strategy, which was poorly received by the market and analysts. The department store retailer said it plans to open around 100 smaller-format shops over the next four years and grow its Sephora unit to $2 billion in annual revenues.
The share price decline has delivered a blow to management in its battle with activist investor Macellum Advisors, which seeks to replace a majority of the board. Macellum believes the company should be able to grow much faster than the company’s target growth rate in the low single digits.
Kohl’s yields a dividend of 3.7% on a payout ratio of 26%. Its dividend is higher than the consumer discretionary average yield of 1.9%.
Hess
Oil and gas exploration company Hess (HES) is last in the list, enjoying a 543% increase in traffic during the past fortnight.
Like many energy companies, Hess increased its quarterly dividend by 50% thanks to strong results. The company’s dividend currently yields 1.6%, which is lower than the energy average of 4.2%. However, the company has rewarded investors with a rising stock price, up 210% since it hit a pandemic low in March 2020.
Hess also said it had repaid $500 million in debt of a $1 billion loan that matured in March 2023. The company said it will increase its returns to shareholders via share repurchases and dividends in the coming period as many of its portfolio projects are becoming cash flow positive.
The Bottom Line
SBA Communications increased its dividend thanks to another strong quarter. PDC Energy also increased its dividend after acquiring Green Western Petroleum for $1.3 billion. Department store operator Kohl’s has seen its stock decline after reporting disappointing earnings and sales growth guidance. Finally, oil and gas explorer Hess raised its dividend by 50% thanks to strong results.
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