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What Are Dividend Growers?

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In this series, we’ll discuss the top eight oil companies by annual dividend growth in 2017, as the chart below shows. ONEOK (OKE), Helmerich and Payne (HP), Kinder Morgan (KMI), Williams Companies (WMB), and National Oilwell Varco (NOV) are S&P 500 companies.

Upward oil and gas price (DGAZ)(UNG) corrections have prompted a positive outlook from the U.S. Energy Information Administration, Goldman Sachs, and Credit Suisse. However, supply excess—especially driven by the United States—should continue to threaten oil prices (USO)(UCO).

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How have the broad indexes performed?

The S&P 500 (SPX-INDEX) offers a dividend yield of 2.1% and a PE (price-to-earnings) ratio of 24.2x. It rose 10%, 19%, and 6% in 2016, 2017, and YTD (year-to-date), respectively. The SPDR S&P 500 ETF (SPY) tracks the S&P 500. The Dow Jones Industrial Average (DJIA-INDEX) has a dividend yield of 2% and a PE ratio of 27.4x. It rose 13%, 25%, and 6% in 2016, 2017, and YTD, respectively. The SPDR Dow Jones Industrial Average ETF (DIA) tracks the Dow Jones Industrial Average. The NASDAQ Composite (COMP-INDEX) has a PE ratio of 26.3x. It rose 8%, 28%, and 7% in 2016, 2017, and YTD, respectively. The Fidelity NASDAQ Composite Index Track (ONEQ) tracks the NASDAQ Composite.

Improving US fundamentals, buoyant stock and Treasury markets, and pro-growth policies hold a lot of potential for the oil and gas industry. We’ll discuss the top dividend growers, compare their performance with the broad indexes, and try to ascertain their prospects in the next parts of this series.

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