The Atlas Arteria Group (ASX: ALX) share price is defying the broader market gloom after management said it would pay out a better than expected dividend.
Shares in the toll road operator jumped 2.3% to $8.16 in late afternoon trade when the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index shed 0.7% of its value.
Fellow infrastructure stocks like the Transurban Group (ASX: TCL) share price and APA Group (ASX: APA) share price are also trading in the red as worries about the economic fallout from the growing coronavirus scare leave few places for investors to hide.
Overtaking lane
Atlas Arteria is proving to the exception even as worries of a virus outbreak in Europe and the US intensifies. The company's assets are in both continents.
But investors aren't bothered as management handed in its full year profit results that showed a near 9% increase in adjusted net profit to $178.2 million for 2019 (it's financial year ends in December).
The good result was driven by a 5.5% increase in profits from Atlas Arteria's stake in French toll road network APRR and Warnow Tunnel in Germany, while its US Dulles Greenway asset detracted.
Better than expected dividends
Management declared an 18 cent a share distribution to shareholders for the second half of 2019 and said it will pay a similar amount for the first half of 2020.
This represents a 6% increase in the company's previous guidance back in November and a 20% uplift in 2019 dividends.
The increase payout is a confidence booster for investors and reflects management's positive outlook for the group – notwithstanding the COVID-19 virus outbreak.
Reaping the rewards
"The 2019 year was a pivotal one for Atlas Arteria," said the company's chief executive Graeme Bevans.
"We built a new corporate team, managed a seamless transfer of management arrangements and, delivered strong underlying performance. We secured arrangements to increase Atlas Arteria's indirect interest in APRR and become a truly independent group."
Atlas Arteria paid $2.3 million in costs associated with internalising management of the assets. It also had to cough up $20.7 million to Macquarie Group Ltd (ASX: MQG) in fees under a transition agreement.
Foolish takeaway
Atlas Arteria spun out of Macquarie and the operations of the managed by the investment bank before the internalisation exercise.
Defensive income stocks have been well supported over the past year or two. Record low interest rates and an increasingly uncertain economic environment are driving interest in such investments. This trend is unlikely to wane in 2020.
