Williams Companies (WMB) stock is trading at a dividend yield of 5.4%, which is close to its five-year average. Williams Companies’ yield is also higher than the energy sector’s (XLE) average yield of 3%. In contrast, the Alerian MLP ETF (AMLP) has a yield of 8%. Williams Companies’ management expects to increase its dividend 10%–15% this year.
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Income investors usually focus on yields, but dividend growth can also have a significant impact on returns. Williams Companies’ dividend growth lags its peers. The company took a deep cut in its payouts in the second quarter of 2016. Williams Companies’ dividend has decreased 1% in the last five years.
Energy midstream giant Energy Transfer (ET) offers a yield of ~8%—one of the highest yields among midstream companies. The company managed to increase its distribution by more than 13% compounded annually in the last five years. Kinder Morgan (KMI) is trading at a yield of 4.0%. The company’s dividend has fallen 14% during the same period.