Kaiser Aluminum Corporation Hikes Dividend Seven Consecutive Years (KALU)
By: Ned Piplovic,
Kaiser Aluminum Corporation (NASDAQ:KALU) has given its shareholders nine annual dividend hikes since introducing distributions 11 years ago and it has a streak of boosting its payouts in each of the past seven years.
While the company’s current 2.04% yield might seem low compared to other sectors, it is only slightly below the average yield in the Basic Materials sector and the second highest in the Aluminum Production market segment. In addition to boosting its dividend payout annually the past seven years, the Kaiser Aluminum Corporation continued to enhance its share price to produce a combined total return of more than 40% over the past year.
The company’s next ex-dividend date on April 25, 2018, is approaching quickly. Therefore, investors interested in a stock with a long record of share price growth – nearly 550% in the past nine years – and a steady dividend income, should consider moving quickly if they want to ensure eligibility for the for the next round of dividend distributions on the March 29, 2018, pay date by adding Kaiser Aluminum shares to their portfolio before the ex-dividend date next week.
Kaiser Aluminum Corporation (NASDAQ:KALU)
Based in Foothill Ranch, California and founded in 1946, the Kaiser Aluminum Corporation manufactures and sells semi-fabricated specialty aluminum mill products. The company sells its products directly to customers through its own sales representatives in the United States, Canada, Europe and China. For customers in Asia, Latin America and the Middle East, the company uses independent sales agents. The company offers rolled, extruded and drawn aluminum products used principally for aerospace and defense, automotive, consumer durables, electronics, electrical and machinery applications. The products for aerospace and high strength applications include heat treat plates and sheets, cold finish rods and bars, hard alloy extruded shapes and seamless drawn tubes. The company’s automotive extrusions include extruded aluminum products for structural components, bumper systems, anti-lock braking systems and drawn tubes for drive shafts. Additionally, the company’s general engineering products comprise alloy and standard extrusion materials used in various applications, including the production of military vehicles, ordnances, semiconductor manufacturing cells, after-market motor sport parts, tooling plates, bolts, screws, nail and rivets.
The Kaiser Aluminum Corporation started paying dividends in 2007. The current $0.55 quarterly dividend is 10% above the $0.50 quarterly payout from the same period the previous year. This current $0.55 quarterly amount is equivalent to a $2.20 total annualized dividend payout and a 2.04% forward yield, which is marginally higher than the company’s 2.00% average yield over the past five years.
After introducing its dividend distribution in 2007, the company boosted its annual amount for the next two years before pausing the annual dividend hike and paying the same $0.96 annual dividend in 2010 and 2011 as it did in 2009. However, the company resumed its annual dividend boosts in 2012 and has enhanced its annual dividend payout amount every year since then.
Over the past seven years, the company enhanced its total annual dividend nearly 130% by boosting its annual amount at an average growth rate of 12.6% per year since 2012. While slightly lower – 16.6% – than the 2.45% average yield of the Basic Materials sector, Kaiser Aluminum Corporation’s current 2.04% yield is nearly 88% higher than the 1.09 average yield of all the companies in the Aluminum Production market segment. Additionally, Kaiser Aluminum Corporation’s current yield – which is the second highest in the segment – is almost 13% above the 1.81% average yield for only dividend-paying companies.
The company’s share price began its current 12-month period from its 52-week low of $77.97 and advanced nearly 50% towards its 52-week high of $116.10 on January 22, 2018. Since peaking at the end of January 2018, the share price pulled back approximately 7% and closed on April 18, 2018, at $107.63. This closing price was 38% above its price from one year earlier and 72% higher than the price from five years ago.
The combined benefit of rising dividends and appreciating assets combined for a total of nearly 42% over the past one year, a total return of 44.3% over the past three years and a total return of 96% over the past five years.
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