PEG Steady Biz Boosts Dividend - Analyst Blog
February 22 2012 - 10:00AM
Zacks
Public Service Enterprise Group (PEG) has
increased its dividend by 3.6%, bringing the annualized dividend to
$1.42 per share from the previous payout of $1.37 per share. The
company’s strong balance sheet and cash flow generating abilities
ensure a steady rise to the dividend.
The company will now pay a quarterly dividend of 35.5 cents per
share compared with the prior quarterly dividend of 34.25 cents per
share. The dividend will be paid on March 31, 2012, to shareholders
of record at the close of business on March 9, 2012.
The company has been regularly paying dividends since 1907. The
last quarterly dividend increase came in February 2010 with a 3%
hike from 33.25 cents to 34.25 cents.
With the current dividend increase, the company revised its
payout policy. It had earlier committed to pay 40% to 50% of its
earnings as dividends. Now it plans to reward shareholders with a
greater percentage of its income.
The company stated that contribution from its stable regulated
business is steadily increasing, a trend that is expected to
continue. Besides, progress on operational, capital investment and
financial goals in 2011 would yield generous free cash flow,
supporting future dividend growth.
The company’s robust portfolio of regulated and non-regulated
utility assets offers a steady earnings base and significant
long-term growth prospects. Moreover, we believe that going forward
the company’s growth will be driven by a low-cost nuclear fleet,
assumed rate relief and added generating capacities.
However, the increasing cost of coal, higher pension and
financial costs, and power-price volatility are areas of concern.
The company presently retains a short-term Zacks #3 Rank (Hold)
that corresponds with our long-term Neutral recommendation on the
stock.
Public Service Enterprise Group is expected to release its
earnings tomorrow. The Zacks Consensus Estimates for fourth
quarter and fiscal year 2011 are currently at 46 cents per share
and $2.73 per share, respectively.
Recently its competitor, Consolidated Edison
Inc. (ED) reported fourth quarter and fiscal 2011 results.
In the reported quarter, earnings from continuing operations came
in at 74 cents, beating the Zacks Consensus Estimate of 71 cents.
Results also compared favorably with earnings from continuing
operations of 69 cents in the year-ago quarter.
CONSOL EDISON (ED): Free Stock Analysis Report
PUBLIC SV ENTRP (PEG): Free Stock Analysis Report
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