Affordable Dividend Shares to Acquire in August
In August 2022, investors seeking stable returns looked to dividend stocks, and three companies that stood out were Kinder Morgan, Douglas Dynamics, and Enterprise Products Partners. While there are no specific search results addressing why these stocks were considered great buys during this period, their historical investment thesis offers insight.
Douglas Dynamics, a niche market leader in snow and ice control equipment, is known for its steady dividend payments. The company's consistent cash flow, coupled with anticipation for winter demand and stable aftermarket revenue, made it an attractive choice.
Kinder Morgan, a major energy infrastructure company, is favoured for its high dividend yields, underpinned by its extensive pipeline network and fee-based revenue model. The company's strong balance sheet and increasingly visible growth prospects also added to its appeal.
Enterprise Products Partners, a master limited partnership specialising in natural gas and crude oil pipelines and storage, offers high and stable distributions. The company's contracted agreements and diversified midstream assets provide a defensive characteristic, making it a popular choice among investors.
In August 2022, these stocks were considered attractive due to their stable or increasing dividends, relatively high yields compared to peers, and defensive characteristics amid energy market volatility and inflation concerns.
Let's delve into the specifics of each company during this period.
Douglas Dynamics, despite facing supply chain headwinds affecting sales, maintained a strong backlog. The company's stock traded at a bargain level, with a dividend yield of around 3.9%, higher than its five-year average of roughly 2.9%. Furthermore, Douglas Dynamics boasted a streak of annual payout increases over a decade long.
Enterprise Products Partners generated a record distributable cash flow of $1.8 billion in its first quarter. The company traded at 6.8 times its free cash flow, significantly below its five-year average. Enterprise Products Partners' yield at the current share price was 7.3%, and the company boosted its dividend by 5.6% in early July, marking its 24th consecutive year of payout increases. The company also had no significant debt maturing until at least 2026 and had capital projects worth nearly $4.6 billion under construction.
Enterprise Products Partners' stock was more than one-third off its all-time high set in 2014, making it an attractive option for investors seeking high yields.
Kinder Morgan, trading at a cheap price, offered investors a dividend yield of over 6%. The company's 2022 cash flow was expected to be about 5% above its initial forecast. Kinder Morgan expressed dissatisfaction with its stock price but remained optimistic about its future, citing increasingly visible growth prospects.
In summary, while there are no specific search results addressing why these stocks were considered great buys in August 2022, their historical investment thesis offers insight into their appeal during this period. These companies, with their stable or increasing dividends, relatively high yields compared to peers, and defensive characteristics, provided investors with attractive opportunities amid energy market volatility and inflation concerns.
Investors in 2022 preferred dividend stocks for their potential stable returns, and among these, Douglas Dynamics, Kinder Morgan, and Enterprise Products Partners stood out. Douglas Dynamics, known for its snow and ice control equipment, attracted investors due to its steady dividend payments, strong backlog, and higher-than-average dividend yield.
Enterprise Products Partners, a master limited partnership specializing in natural gas and crude oil pipelines, enticed investors with its high and stable distributions, record distributable cash flow, and a lower free cash flow multiple compared to its five-year average.
Kinder Morgan, an energy infrastructure company, offered investors a high dividend yield and expectations of increased cash flow compared to initial forecasts. Investors saw an opportunity in the company's stock, which was trading at a cheaper price.
Investors seeking high yields found Enterprise Products Partners appealing, given that the stock was more than one-third off its all-time high set in 2014. On the other hand, Kinder Morgan, despite expressing dissatisfaction with its stock price, remained optimistic about its growth prospects.
Personal-finance advisors might suggest these stocks to their clients due to their defensive characteristics and attractive yields amid energy market volatility and inflation concerns. Additionally, gadget enthusiasts might find smartphones or technology products promising amidst the high returns from these stocks, while basketball fans could enjoy watching the NBA games during their leisure time.
Each company, with its unique strengths, offered investors attractive opportunities during this period, making them great buys in the eyes of many investors.
