3 Securities Offer 6%-Plus Yields and Double-Digit Dividend Boosts
By: Ned Piplovic,
Three securities recently declared double-digit percentage hikes to their dividend payouts that will produce yields in the 6%-9% range.
In addition to the excellent dividend return, one of the securities rewarded its shareholders with 150% capital appreciation in the last year. Also, all three securities have been growing their dividend payouts at double-digit percentage average growth rates during the last few years.
The ex-dividend date for all three securities is February 15, 2017, with payout dates in late February and early March.
Liberty All-Star Equity Fund (NYSE:USA)
Liberty All-Star Equity Fund is a diversified, closed-end, large cap fund with the primary objective of balancing capital appreciation and current income to maximize total investment return. Currently, the fund’s top holdings are: State Street Institutional U.S. Government Money Market Fund (GVMXX), Alphabet, Inc. (GOOG), Visa, Inc. (V), Mondelez International, Inc. (MDLZ) and saleforce.com, Inc. (CRM).
The fund bumped up its quarterly dividend by 8.3% from $0.12 to $0.13. The annualized payout of $0.52 translates to a 9.1% yield. The fund’s 2017 payout is on track to be its fifth consecutive boost of the annual dividend. With an average growth rate of 10% annually, the 2017 payout will be 63% higher than the 2012 payout.
The share price grew 27.7%, with minimal volatility, between its 52-week low on February 11, 2016, and its 52-week price high on February 2, 2017. The share price closed on February 8, 2017 at $5.41, which is merely 0.6% below the year’s peak price and 27% above the 52-week low from last February.
Geo Group Inc (The) (NYSE:GEO)
The GEO Group owns and operates around 100 correctional and detention facilities in the United States, Australia, South Africa, the United Kingdom and Canada. Additionally, the company provides government-outsourced services specializing in the management of correctional, detention and re-entry facilities.
The GEO Group also operates immigration detention centers and provides services to immigration and customs enforcement to improve the participation of non-detained aliens in the immigration court system. The immigration-related segment of GEO’s business could see a positive impact from the potential new focus on immigration law enforcement by the Trump administration.
The company boosted its quarterly payout by 7.7% from $0.65 to $0.70. Its annual dividend of $2.80 converts to a 6.3% yield. The total payout for 2017 will be a third consecutive year of rising dividends. Over that period, the annual payout grew at an average annual rate of 53.4% and is 135% higher than the 2014 payout.
The company’s share price appreciated 33% between February and early August 2016, but lost more than half of its value in the two-week span after that. The share price dropped 50% and reached its 52-week low of $16.26 in one day during trading on August 18, 2016.
The price remained relatively flat until November 9, 2016, when the share price reversed course and started moving up. By the closing on February 8, 2017, the share price rose 157% to reach its highest level in a year and just 7.5% below its all-time high price from two years ago.
Viper Energy Partners LP (NASDAQ:VNOM)
Viper Energy Partners, a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG), owns and exploits oil and natural gas properties in North America. The company holds mineral interests covering an area of approximately 17,000 acres in the West Texas’ Permian Basin. The company estimates its current proved oil and natural gas reserves at more than 26,500 barrels of crude oil equivalent.
Viper Energy Partners started paying a dividend in 2014. After cutting its annual payout 10% in 2016, the company increased its quarterly dividend for 2017 by 24.6% from $0.207 to $0.258 per share. The annualized payout of $1.032 produces a 6% yield.
The share price rose 42% between February and June 2016. However, the share price tumbled 30% in late July and another 18% in early November to reach its 52-week low of $13.53. Since then, the share price rose 26%. As of the market’s close on February 8, 2017, the price was 15.5% below its 52-week high.
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