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.
Allegion has trended first this week, as the company confirmed its dividend after reporting better-than-expected financial results. GFL Environmental has raised its dividend and overcame regulatory hurdles for a deal in the waste management space that is ripe for consolidation. Highpeak Energy shares have surged in recent days thanks to a spike in crude oil prices. Banco Santander Chile has confirmed a 60% payout to shareholders in 2021, same as last year.
Don’t forget to read our previous edition of trends here.
Allegion
Allegion (ALLE) has trended first this fortnight, seeing its viewership advance a staggering 2,400%. Allegion, an Irish-domiciled provider of security products for homes and businesses, announced a quarterly dividend of $0.41 per share, unchanged from the previous quarter. Allegion’s dividend yields 1.51% annually on a payout ratio of 25.50%.
Allegion’s shares have fallen around 20% so far this year, despite the company seeing its revenues and net income jump 5.4% and 53%, respectively in 2021. This has been the company’s best year from an operational standpoint. The compressed valuation multiple plus a history of rising dividends could make the company a compelling buy for a long-term investor.
Indeed, the company increased its quarterly dividend every year since 2014, when it paid eight cents per share. In 2020, when the company’s results suffered due to the COVID-19, Allegion raised its dividend by 18.5%.
Allegion will pay its next quarterly dividend on June 30 to shareholders of record on June 16.
GFL Environmental
GFL Environmental (GFL) has been the star of this fortnight as it trended thanks to a double-whammy of positive news. GFL, a waste management services company, has seen its traffic jump by 1,967% during the past fortnight.
This was hardly surprising. GFL raised its quarterly dividend by 10% from 1.1 cents to 1.2 cents. The payout ratio is just 6% and its dividend yields 0.15%, suggesting the company has more room to increase its payout in the coming years.
GFL also has reached an agreement with the Canadian Competition Bureau over its proposed acquisition of Terrapure Environmental for around $734 million. The deal will go ahead after the company agreed to divest four liquid waste facilities and three tank farms in Canada. These assets generated around $20 million of sales in 2022.
The waste management industry has been undergoing consolidation recently, meaning there is a rush of deals in order to capture market share. In a larger recent deal, Republic Services (RSG) acquired US Ecology for an enterprise value of $2.2 billion.
Republic Services has outperformed GFL over the past year by around 25 percentage points, indicating the clear benefits of becoming a consolidator in the industry. Republic Services, a $40+ billion market capitalization company, has operating margins of around 11%. Meanwhile, GFL, with a market capitalization of $10 billion, has been losing money over the past five years.
Highpeak Energy
Highpeak Energy (HPK) has taken the third place in the list, seeing its viewership rise 1,400%.
Highpeak has trended after its stock price surged more than 50% over the past five days. Highpeak, an independent oil and gas company, has benefitted from rising oil prices, which have been rising incessantly as a result of the war in Ukraine and strong global demand.
While high oil prices have not resulted in similar gains for oil and gas producers, some of the healthier companies have been attracting interest from mainstream media. Highpeak surged after closely-watched financial commentator Jim Cramer said in a TV segment he was bullish on the stock, although he later said the shares got ahead of themselves.
Highpeak’s revenues rose 793% to $220 million in 2021, while its net income advanced 154% to $55 million. Cramer said the company has solid margins and a strong position in the Permian Basin.
Highpeak pays a dividend of 10 cents per share, resulting in an yield of 0.3%.
Banco Santander Chile
Banco Santander Chile (BSAC) has taken the last position in the list this fortnight, with a healthy rise in viewership of 1,200%. Shares in Banco Santander Chile have had a good run so far this year, rising 29% as higher inflation and lower interest rates led to higher revenues and profitability. However, as interest rates are rising and inflation is heading lower in Chile, the bank is likely to suffer going forward.
Banco Santander Chile recently approved a dividend of 60% of its 2021 net income to shareholders, resulting in an yield of 5.6%. The remaining earnings will be used to increase the bank’s reserves. Banco Santander Chile will pay its dividend on May 5.
The Bottom Line
Allegion shares have fallen this year, despite an improvement in the company’s earnings. GFL Environmental has underperformed its peer Republic Services, amid a race to consolidate the industry. Highpeak Energy’s stock surged after the company was pitched by influential market commentator Jim Cramer. Banco Santander Chile has had a strong run this year, but the future is unclear as rising interest and lower inflation could mean a challenging year for the bank.
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