2 Utilities Offer 5%-Plus Dividend Boosts and 9%-Plus One Year Asset Appreciation
By: Ned Piplovic,
Two regional power utility companies are continuing steady dividend boosts with 5%-plus hikes after more than a decade of rising dividends.
With dividend yields of 2% and 3%, both companies are in line with the utilities sector average yield of 2.51%. In addition to the heightened dividend payouts, the two companies have provided their investors with a 9% and 17% asset appreciation over the last year and a stock price growth of more than 80% over the last five years.
Ex-dividend dates for both equities are in mid-June with early-July pay dates.
UGI Corporation (NSE:UGI)
UGI Corporation distributes, stores, transports and markets energy products and related services. The company distributes propane to almost two million residential, commercial and wholesale customers in all 50 U.S. states through its 1,900 distribution locations. In addition to distributing the propane to its customers, the company sells, installs and services propane appliances and heating systems. The company also distributes liquid petroleum gas (LPG), natural gas, liquid fuels and electricity to approximately 800,000 residential, commercial and industrial customers at approximately 44,000 locations.
Additionally, UGI Corporation operates coal-fired, landfill gas-fueled, solar-powered and natural gas-fueled electric power generation facilities, a natural gas liquefaction, storage and vaporization facility, a propane storage and stations and several rail transshipment terminals. Founded in 1882, the UGI Corporation is based in King of Prussia, Pennsylvania.
The enhanced quarterly distribution of $0.25 is 5.3% higher than the previous quarter’s $0.2375 payout. The annualized dividend amount of $1.00 is equivalent to a 2% yield. The company started paying a dividend in 1885 and has paid consecutive dividend boosts for the past 20 years. Over that time, the annual dividend payout grew at an average rate of almost 6% every year.
The share price grew 17% just over the past year and 158% over the past five years. After a quick 14% upsurge between May and September 2016, the share price lost all of those gains by Nov. 10, when it reached its 52-week low. However, after reversing the downtrend, the price grew with minimal volatility for the remainder of 2016 and throughout 2017.
Since reaching its 52-week high on April 27, 2017, the share price pulled back 2.8%. However, the May 11, 2017, closing price of $49.14 is still 21.6% higher than the October low and 18.2% above the May 2016 price.
Portland General Electric Company (NYSE:POR)
Portland General Electric Company is an integrated electric utility company that engages in the generation, wholesale purchase, transmission, distribution and retail sale of electricity in the state of Oregon. The company operates seven thermal plants, seven hydroelectric plants and two wind farms. Portland General generates a quarter of its power from natural gas and 11% from renewable sources like wind and solar sources.
In addition, the company owns an electric transmission system of more than 1,200 circuit miles for medium and high voltage power, as well as more than 27,000 miles of end-user, standard voltage distribution lines. The company is headquartered in Portland, Oregon, and has been serving residential, commercial and industrial customers in Oregon since its foundation in 1930.
As just another increase in a line of consecutive dividend boosts, Portland General hiked its quarterly dividend 6.3% from 0.32 to $0.34. The annualized payment amount of $1.36 yields 3%, which is in line with the 3.1% average yield for the past five years. The company enhanced its annual dividend every year since it started paying dividends in 2006. Over the past 11 years, the annual dividend rose annually by an average rate of 3.8%.
After gaining 9% from May through early July 2016, the share price dropped 12% to its 52-week low in October 2016. Since the October low, the share price grew at a steady pace and reached its 52-week high at the end of April 2017. The price closed on May 11, 2017, at $45.13, which is just 3.7% below the April peak and 9% above the share from May 2016, one year ago..
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