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This Canadian Oil Stock Pays Dividends Monthly

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Thursday, 21 February 2019 10:17 AM Current | Bio | Archive

High-yield stocks can be appealing investments for income purposes. In particular, high-yield stocks can be particularly attractive for retirees. Even better, a few high-yield stocks pay their dividends each month, rather than the more typical quarterly or annual dividend schedule.

Inter Pipeline Ltd. (IPPLF) is a Canadian energy company with a very high dividend yield above 8%, and an added benefit as a monthly dividend stock. The company has a promising growth outlook ahead, and a high dividend payout.

Pumping Out Growth And Dividends

Inter Pipeline is a major petroleum transportation, storage and natural gas liquids (NGL) processing business based in Canada. It has an extensive network of assets, housed in four business segments in western Canada and Europe. Its pipeline systems span nearly 5,000 miles in length and transport over 1.4 million barrels per day. Its NGL operations process over 240,000 barrels per day. The company’s European operations consist of 23 petroleum and petrochemical storage terminals, with a combined storage capacity of approximately 37 million barrels.

Inter Pipeline’s four business segments include Oil Sands transportation, NGL Processing, conventional oil pipelines, and bulk liquid storage. The Oil Sands transportation and NGL processing make up roughly 80% of total company profits.

2018 was a strong year for Inter Pipeline. Funds from operation (FFO) increased 10% for the year, and hit a company record. Net income increased 12% last year, and also set a record. On a per-share basis, FFO and net income increased 5.7% and 8.5%, respectively.

Growth is set to continue in 2019 and beyond. Acquisitions and new growth projects will be Inter Pipeline’s major growth catalysts. Inter Pipeline acquired NuStar Europe for $270 million, which added 33% to the company’s storage capacity in Europe. In addition, Inter Pipeline is investing organically, first to expand its Central Alberta Pipeline System. Next, Inter Pipeline is constructing Canada’s first integrated propane dehydrogenation and polypropylene complex.

The company’s success in 2018 and its promising future growth potential allowed it to raise its dividend for the 10th consecutive year. The new annualized dividend rate of $1.30 per share in U.S. dollars, represents a dividend yield of 8%. This is a very high yield, at roughly four times the average dividend yield of the S&P 500 Index. For this reason, Inter Pipeline may be a particularly attractive stock for income investors.

Inter Pipeline: A Strong Income Stock

Inter Pipeline has a long history of dividend growth. The company has increased its dividend each year since 2002, with the exception of 2008 when it paid a flat dividend due to the Great Recession. The dividend appears to be secure. Inter Pipeline had a dividend payout ratio of 60% last year, which gave the company the ability to raise the dividend.

Along with a high dividend yield of 8%, Inter Pipeline makes its dividend payments every month. This results in more frequent dividend payments for shareholders than the quarterly, semi-annual, or annual dividend schedule.

For investors interested in a high-yield monthly dividend stock with a sustainable dividend payout, Inter Pipeline stock is worth a look.

Ben Reynolds is CEO of Sure Dividend. Sure Dividend helps individual investors build high quality dividend growth stock portfolios for the long run.

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BenReynolds
Along with a high dividend yield of 8%, Inter Pipeline makes its dividend payments every month. This results in more frequent dividend payments for shareholders than the quarterly, semi-annual, or annual dividend schedule.
canadian, oil, stock, dividends
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2019-17-21
Thursday, 21 February 2019 10:17 AM
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