Kinder Morgan's pipelines, storage facilities, and terminals are integrated into almost all parts of the U.S. The firm makes most of its money from natural gas pipelines, with remainder balanced between refined products and oil pipelines, storage, and sales of carbon dioxide used in oil production. Kinder Morgan (KMI) has grown since its formation in 1997 to become of the largest midstream infrastructure companies in North America. With increased focus from management on the core business, AT&T has shown steady growth in wireless services and broadband revenue while also improving margins.Ĭoupled with a more sustainable payout ratio near 50% and consistent free cash flow generation to further strengthen its BBB rated balance sheet, AT&T's high dividend looks safe.Īs the company continues returning to its communication roots and no longer focuses on empire-building, investors interested in the highest paying dividend stocks may consider giving AT&T another look. These businesses enjoy high barriers to entry due to their capital intensity, and they generate predictable cash flow over an economic cycle thanks to the essential needs they serve. After shedding DirecTV and its media business, wireless and internet services now drive the bulk of AT&T's profits. From overpaying for acquisitions to overextending the company's balance sheet and cutting the dividend in 2021, management has found no shortage of ways to destroy shareholder value.īut the future looks brighter. While pricing and operating rates will remain sensitive to the broader economy, International Paper can hold its ground as a top high dividend stock for investors comfortable with the industry's cyclicality.ĪT&T (T) has frustrated investors for years. Looking ahead, long-term box demand will likely grow slowly but steadily thanks to increased e-commerce activity and stable shipments in key markets like food manufacturing. For example, the company's BBB rated balance sheet is the healthiest it has been in at least a decade, reflecting management's debt reduction efforts and avoidance of major acquisitions. International Paper looks poised to be a more dependable high dividend stock today. That cut took place in 2009 and was caused by the firm's highly leveraged balance sheet, which swelled in 2008 after completing a $6 billion deal to buy Weyerhaeuser's packaging assets. These qualities have helped International Paper generate positive free cash flow in all manner of economic environments.Īside from a 10% dividend reduction related to International Paper's 2021 divestiture of its lower-margin printing papers business, which accounted for about 20% of sales, the company has only cut its dividend once since making its first payout in 1946. The containerboard market has consolidated over time to be dominated by just a handful of companies, and International Paper is the largest player with over 30% share in North America.Īs a result, nearly all of the company's production capacity is positioned in the first quartile on the global cost curve, and the shrinking number of competitors has helped the industry's operating rates and pricing discipline.
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