Monday, April 29, 2013

Another Dividend (well distribution) Boost

I don't want to write a post about every single dividend/distribution increase, however I find this one to be pretty intriguing.

Linn Energy (LINE) announced a new distribution policy.  The regular distribution will be maintained this quarter.  Nothing special this was already announced.  Here is where it gets interesting: starting in July, the distribution will be monthly and increased by 6.2%.  A 6.2% boost on something yielding 7% is truly massive!  It's like getting a 14.5% increase on a stock yielding 3% or a 21.7% increase on a stock yielding 2%.

Pretty impressive!

The catch is that this is not sustainable long term.  The distribution itself is covered by cash flow, but I don't think we'll see 6% increases annually for the next 20 years...  That's okay.  I don't need to see large boosts from my high yielders every year.  The monthly distribution showcases Linn's commitment to unit holders and shareholders.  It's pretty rare to see a policy change like this.

It's the investors they have in mind here.  Thanks!


  1. Nice to see another name paying dividends monthly. I didn't realize they were changing. Thanks for the info.

    1. It's uncommon to see a company do this. I love monthly dividends and it does have value to me.