Though the commodity space has faced significant headwinds over the past year, there have been certain corners of the market that have proven to be worthwhile investments. One such segment has been commodity producer equities – some of which have benefited from the bull run seen in 2013. But for those investors who are still looking for more bang for their buck, we turn to an elite group dubbed the “Dividend Aristocrats.” This select group of companies have increased their annual dividends every year for at least the past 25 years, giving yield-hungry investors a steady stream of current income [for more on commodity dividends subscribe to our free newsletter].
When it comes to commodity investing, dividends rarely overlap. But after scouring through the list of dividend aristocrats, we found three strong commodity producers that deserve a closer look when it comes time to making your hard asset allocation. While these may not be a pure play on the underlying commodities that are produced, the growing income stream and steady performance may be too enticing for investors to ignore.
Northwest Natural Gas (NWN)
The Portland-based company is the largest independent natural gas utility in the Pacific Northwest, serving more than 655,000 residents and businesses in Oregon and southwest Washington. The company holds interests in approximately 12,000 net acres of underground natural gas storage in Oregon, and 5,000 net acres of underground natural gas storage in California. Currently, NWN pays out a quarterly dividend of $0.46 per share, or $1.84 annualized.
Quick Stats (as of 1/22/2014)
- Years of Increasing Dividends: 58
- Dividend Yield: 4.32%
- Payout Ratio: 82.1%
- Next Dividend Payout: 2/14/2014
National Fuel Gas Co (NFG)
This independent oil and gas firm is headquartered in New York, and provides natural gas transportation services to approximately 735,000 customers in Buffalo, Niagara Falls and Jamestown, New York, and Erie and Sharon, Pennsylvania. As of September 30, 2013, the company had proved developed and undeveloped reserves of 41,598 thousand barrels of oil and 1,299,515 million cubic feet of natural gas. Over the trailing one-year period, the stock has gained nearly 35% [see What Big Banks Are Saying About Commodities in 2014].
Quick Stats (as of 1/22/2014)
- Years of Increasing Dividends: 43
- Dividend Yield: 2.60%
- Payout Ratio: 46.0%
- Next Dividend Payout: TBA
Nucor Corporation (NUE)
This company engages in the manufacturing and sale of steel through out North America and the rest of the world. Nucor is divided into three distinct segments: Steel Mills, Steel Products, and Raw Materials. Recently, the company upped its quarterly dividend 0.7% from its prior distribution of $0.3675. The stock now pays out of $0.37 per share, or $1.48 annualized.
Quick Stats (as of 1/22/2014)
- Years of Increasing Dividends: 40
- Dividend Yield: 2.91%
- Payout Ratio: 105.7%
- Next Dividend Payout: 2/11/2014
Piedmont Natural Gas (PNY)
This natural gas utilities company is primarily engaged in the distribution of natural gas to more than one million residential, commercial and industrial utility customers in North Carolina, South Carolina and Tennessee, including 62,000 customers served by municipalities who are wholesale customers. The company owns and operates eight CNG fueling stations, as well as approximately 22,000 linear miles of distribution mains and approximately 2,800 linear miles of transmission pipeline. Currently, PNY pays out a quarterly distribution of $0.31 per share, or $1.24 annualized [see The Next Big Industry: Sand].
Quick Stats (as of 1/22/2014)
- Years of Increasing Dividends: 35
- Dividend Yield: 3.75%
- Payout Ratio: 68.5%
- Next Dividend Payout: TBA
Questar Corp (STR)
This Utah-based integrated natural gas company distributes natural gas as a public utility in Utah, southwestern Wyoming, and a small portion of southeastern Idaho serving 930,760 sales and transportation customers. Questar owns and operates distribution systems comprising 27,612 miles of street mains, service lines, and interconnecting pipelines, and also has long-term franchises granted by communities and counties in its service area. Currently, the stock pays out $0.72 annually.
Quick Stats (as of 1/22/2014)
- Years of Increasing Dividends: 34
- Dividend Yield: 3.13%
- Payout Ratio: 59.5%
- Next Dividend Payout: TBA
Exxon Mobil (XOM)
Exxon is one of the biggest companies in the world and it has a dominant position in the oil & gas industry. The company has approximately 37,228 gross and 31,264 net operated wells, with operations throughout the U.S., Canada, South America, Europe, Africa, Asia, and Australia. The stock has a current market cap of just over $428 billion and trades just over 12 million times per day. As for dividends, the company pays out a quarterly dividend of $0.63 per share, or $2.52 annualized [see Berkshire's Latest Acquisition: Another Big Oil Bet].
Quick Stats (as of 1/22/2014)
- Years of Increasing Dividends: 31
- Dividend Yield: 2.57%
- Payout Ratio: 34.2%
- Next Dividend Payout: TBA
Energen Corp (EGN)
This Alabama-based company engages in the development, acquisition, exploration, and production of oil, natural gas, and natural gas liquids in the United States. As of December 31, 2012, the company had approximately 750 million barrels of oil-equivalent proved, probable, and possible reserves. Currently, the stock pays a quarterly dividend of $0.145 per share, making it one of the lowest yielding stocks on this list.
Quick Stats (as of 1/22/2014)
- Years of Increasing Dividends: 31
- Dividend Yield: 0.81%
- Payout Ratio: 18.8%
- Next Dividend Payout: TBA
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Disclosure: No positions at time of writing.
