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!
Nice to see another name paying dividends monthly. I didn't realize they were changing. Thanks for the info.
ReplyDeleteIt's uncommon to see a company do this. I love monthly dividends and it does have value to me.
DeleteCheers!