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.
High-yielding companies in the real estate and energy sectors have seen strong traffic in the past fortnight. Oil pipeline operator Plains All American Pipeline has taken the first place in the list, as the company raised its already high dividend. Second and third in the list are real estate companies Armour Residential REIT and Global Net Lease, as both have double-digit-yielding dividends. Last in the list is wholesale retailer Costco, which reported strong sales for December.
Don’t forget to read our previous edition of trends here.
Plains All American Raises Dividend
Plains All American Pipeline (PAA) has placed first in the list with an increase in viewership of 247%.
The master limited partnership (MLP) that transports liquefied gas in the U.S. and Canada has surprised its shareholders with a quarterly increase in the distribution of 6.2 cents per share to 38 cents, an increase of 20% on an annualized basis.
As a result of the increase, Plains’ dividend now yields 7.4%. The company’s stock has gradually recovered since it plunged during the Covid-19 pandemic, and is now up more than 261% since March 2020. However, the stock has not yet reached its pre-pandemic levels and trades at about 60% below its record high reached in 2014.
Plains does have some tailwinds going forward, as President Trump outlined his plan to allow energy companies to drill unencumbered by environmental regulations. As a result, Plains could see opportunities to expand its pipelines, as more liquefied natural gas will flow to the end users. In addition, growing energy demand from artificial intelligence data centers will likely be met with natural gas in the near term, which could provide a further boost to the stock.
Source: Barchart.com
Armour Residential REIT Continues to Struggle
Armour Residential REIT (ARR) has taken the second spot in the list, with an increase in traffic of 95%.
Armour Residential, which invests in mortgage-backed securities, has seen its shares slump about 10% over the past six months. The company expected a respite from lower interest rates, as the Federal Reserve started the rate-cutting cycle. However, a strong economy in recent months has led to higher U.S. Treasury yields, prompting investors to speculate that the Federal Reserve may hit pause. This does not bode well for Armour, which needs low rates to finance the purchase of mortgage-backed securities.
Armour, which pays 90% of its gains back to shareholders, has a dividend that yields 15.4%.
Source: Barchart.com
Global Net Lease Dividend Under Pressure
Global Net Lease (GNL) has taken the third place in the list, with an advance in traffic of 87%. Global Net Lease, which focuses on leasing back properties from business customers in the industrial and office spaces, has fallen on hard times.
The company’s profitability has declined dramatically, as the company has been getting rid of assets, which impacted revenue growth. In the third quarter, revenue of $196.6 million was down $7 million from the previous quarter, with the decline attributed to asset disposition.
The company has been selling assets to reduce its huge debt load. The company has about $4.8 billion in debt, and its earnings currently cover the interest payments 2.5 times.
While Global Net Lease has a high dividend yield of more than 15%, it is under threat of being cut due to the company’s struggles with high debt levels. A recent run-up in Treasury yields does not help the company either.
Costco Reports Strong Sales
Costco Wholesale (COST) is last in the list, with an advance in viewership of 77%. Costco has been on a tear lately, with the stock rising 38% in the past 12 months, as the wholesaler continued to attract customers with its mix of quality and reasonably priced products.
For the month of December, Costco reported net sales of $27.5 billion, up 10% compared to the same period last year. Same-store sales increased by more than 9%, while online sales increased 34%. The company was able to attract more upper-middle-class customers to its stores during the period.
Source: Barchart.com
The Bottom Line
Plains All American has raised its dividend as the company is expected to benefit from potentially more oil drilling under the new Trump administration. Rising U.S. Treasury yields have hit Armour Residential REIT. Global Net Lease faces pressure to cut its high-yielding dividend. Last on the list is Costco, which reported strong sales in December.
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