Monday, October 22, 2007

a Husky dividend

Husky Energy (HSE), a Canadian integrated energy company, has just raised its dividend by 32%.

This company's recent record of dividend increases has certainly grabbed my attention as of late. Let's look at the numbers:

According to Husky's investor relations:

Dividends Paid
2004 = $0.44
2005 = $1.06
2006 = $1.50
2007 = $2.25

This represents a compound annual growth rate of the dividend of over 70%! This is quite impressive.

During the same time period the share price has gone up about 260% or a CAGR of about 53%! Also very strong.

The stock is currently yielding 3.1%, however they have been known to pay out special dividends as well in the past few years. This is surely not a typical Canadian energy company when it comes to the manner in which they return money to shareholders. Their emphasis on dividends has been unique. It would be hard to argue that this has been one of the best Canadian energy names to hold over the past 3 years.

One share bought in early 2004 would now be yielding 19% on original investment. Not too shabby.....


telly said...

Pretty sweet deal eh? Do you own HSE? It's one I'd love to own but seems a bit pricey with the run-up recently and they've not been paying dividends for long enough for my liking. We don't really know what will happen to the dividend in a downturn.

FourPillars said...

Telly beat me to the question - do you have any?


telly said...

mg, you often discuss what's in your non-registered account (and I love reading about it) but I was wondering...what's in your registered account? Are they group plans? Do you index? Funds? A post on this would be interesting if you're willing to share.


MG said...

I do not own HSE directly.

telly, I was planning on posting regarding my registered account in the future. I will bump that up. It's not all that exciting...

Middle Class Millionaire said...

Husky is unique because they’re structured as a corporation however there are a plethora of oil trusts out there who pay their profits out to shareholders. I would personally have a hard time holding this one as a core position in a dividend portfolio though based simply on the commodity risk. However, with a 42% payout ratio the dividend certainly does seem sustainable.