Inergy, L.P. increases dividend for 29th consecutive time

Posted by Tim

January 27, 2009

Inergy, L.P. | Investor Relations | Press Release.

Inergy LP (NRGY: 37.84 -0.04 -0.11%) a propane distributor and natural gas midstream operator has announce their 4th quarter dividend of 64.5¢. This is a penny more than the 3rd quarter payout and 6.6% higher than the distribution of a year earlier. As I noted in the headline this is the 29th consecutive dividend increase for Inergy.

Inergy has grown their business through acquisition of local propane distributors and some creative growth in their midstream business. For example, in 2008 they acquired a salt production company that will allow them to use the salt caverns to store billions of cubic feet of natural gas.

The cold winter should bode well for propane sales. The current lower prices for propane will make the customers less afraid of their energy bill as they heat their homes to fight the cold. The majority of Inergy’s propane business is to retail customers. This allows them to maintain their margins no matter what the level of energy prices.

The new dividend rate give NRGY a yield of over 11%. It is hard to believe that during the market lows in November this stock had a yield of over 20%. Kudos to any investors who picked up some share at that time.

Notes: NRGY is a component of this site’s Income Portfolio. If you are interested in income stocks, do not miss my post on shipping stocks.