Micro Blog #17: My Quarterly Dividend Health Update For Utilities: PPL, SO, DUK, D, and ED

Tracking dividend health is part of my job as a dividend investor. I don't like to solely depend on dividend ratings and other analysis provided by various professional websites, as they are covering hundreds of stocks and may miss or delay reporting issues/concerns related to a company I own.

Instead, I like to read the latest available earnings report to determine what management is saying about dividends and the overall health of the company. 

Here are the quarterly dividend health highlights for utilities I own as of Q4 '2017 Earnings Reports:

PPL Corporation (PPL)
  • Has paid dividend every quarter since 1946.
  • Announced a 4% dividend hike for 2018.
  • Mgmt. reiterated that dividend is secure and they are committed to continued dividend growth.
My Notes: A little concerned about UK regulatory environment. Also concerned that management did not reiterate 4% dividend growth commitment through 2020, something they did in the past. Will need to keep a close eye on this one. Holding off adding to it till UK situation settles down.

Southern Company (SO)
  • 70-year track record of dividends and dividend growth.
  • Expects to support dividend growth of $0.08 per year. Comes out to about 3.4% growth rate per year.
  • Expects payout ratio to be in the 80% range till Vogtle project is complete and in-service.
  • Expects payout ratio to come down into 70s after Vogtle project completion.
  • Overall, mgmt is comfortable with the higher payout ratio till Vogtle project completion.
My Notes: Seems mgmt. has a handle on Vogtle situation and committed to increasing dividend despite higher payout ratio. I have a full position in SO, will hold off adding more till payout ratio comes down to a normal range.

Duke Energy (DUK)
  • 2018 marks the 92nd consecutive year paying the quarterly cash dividend
  • Expect to maintain our annual dividend growth rate of approx. 4% - 6% through 2022
  • Targeting payout ratio in the 70% - 75% range.
  • Due to the impact of tax reform, expect the payout ratio to be higher than the targeted range initially and dividend growth will be closer to the low end of the guidance range for the next couple of years.
  • The dividend growth rate will increase once payout ratio solidifies in the payout ratio range.
My Notes: Like the 4% - 6% dividend growth commitment through 2022. Mgmt. seems comfortable with the payout ratio. I'll be further building up this position.

Dominion Energy (D)
  • Increased dividend by 10% for 2018.
  • Mgmt. expects dividend growth of at least 10% through 2020.
  • Expects SCANA acquisition to have a positive result on growth.
My Notes: My largest utility position, has the highest dividend growth rate. Will be adding more despite at full position, as I don't mind being overweight in this stock.

Consolidated Edison (ED)
  • Declared a quarterly dividend of 71.5 cents a share on its common stock -- an annualized increase of 10 cents over the previous annualized dividend of $2.76 a share and its 44th consecutive annual increase.
  • Indicated that the company expects to continue to pay its stockholders between 60% and 70% of its adjusted earnings. 
My Notes: Very comfortable with ED and its dividend history. Has also performed very well. Need to build up to a full position. 


Disclaimer: The quarterly highlights are based on each company's latest earnings report transcripts or press releases. I do not take responsibility for the accuracy of the information presented in this article, please do your own due diligence before investing in any of the stocks mentioned here.  

Comments

  1. Mr. ATM, Very helpful and useful post since I also own all but ED. Thanks for putting it together. Appreciate the facts and you editorial comments. Tom

    ReplyDelete
  2. I really appreciate your blogs where you share your insights, approach and used information for your decisions. It has really helped me starting out. Rest assured: I do my own DD.
    Thanks!

    ReplyDelete
    Replies
    1. Appreciate the kind words Tom. That’s all we can do is share our insights and approach and rest is up to the readers how they use the information.

      Delete
  3. My name isn't Tom but I also appreciate your words of wisdom :) I need to add some companies in this sector eventually.

    ReplyDelete
    Replies
    1. I would be worried if your name was Tom too ;) Well I'm not old or experienced enough to claim that my words are words of wisdom, but what I can say is what I write here is based on my own experiences with investing and how I manage my investments.

      Some of the methods I use may seem quirky or obsessive, but that's how I like it and why I feel comfortable with my investments. So as they say in investing or money matters, do as you feel comfortable.

      Delete
    2. Okay. That's enough Tom bashing. Mr. Tom Defined Sight. It's got a nice ring to it. And you don't think I check back :)

      Regards, Tom

      ps. I actually had to do a double take on Tom 2's comment. I was wondering for a moment if I left it.

      Delete
    3. Funny, I also at first thought you left me double comments, but then I realized it's a comment from a different Tom. I think he has left me comments before on older blogs.

      Regardless, always appreciate hearing back from readers and what makes blogging worth it.

      Delete
  4. Lol!
    Yep, another Tom. Sorry for the inconvenience.
    As far as I can remember it;s the first time I gave a comment. Long time reader/follower though.

    ReplyDelete
    Replies
    1. No problem Tom, and not an inconvenience at all. You are always welcome to comment and thanks for being a long time reader/follower.

      Delete

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