BBL announced this week a semi-annual dividend increase from 0.59 to 0.62. Since I’m in the U.S., I hold ADR’s , and each ADR is worth two shares. So my dividend payment will go from $1.18 to $1.24 per ADR that’s payable Sept. 23, 2014 to holders of record Sept. 5, 2014. This represents a 5.1% increase to dividend.
If you’ve been keeping up with BBL, they recently announced a “demerger” as they call it where they plan to spin-off a metals & mining business. Shareholders didn’t respond well, sending shares down 5% earlier this week.
After this spin-off , BHP Billiton will almost be exclusively focused on iron ore, copper, coal and petroleum and possibly potash basins. Shareholders of BHP Billiton will receive shares in the new company on a pro rata basis. This new company will be headquarted in Perth and listed on the Australian stock exchange with a second listing in South Africa. This new business would combine aluminum, coal , nickel, manganese and silver.
BBL has paid dividends for 11 consecutive years making them a Dividend Contender.
Shares are still up since the beginning of the year and quite a bit higher than my basis. I plan to add just a little to BBL so they are a full position. I haven’t decided what I’ll do with the new company. I will likely sell even if they pay dividends since the dividends would require foreign taxes. Please note that by holding BBL, they are based in London so I don’t have to pay any additional foreign withholding tax.
Since I own 106.66 shares, this will increase my yearly dividends by $12.80. I’ve had 27 stocks in my portfolio increase their dividend already this year.