Southwest Utility Offers 2.5% Yields and 12 Years of Rising Dividends
By: Ned Piplovic,
A utility company from the U.S. Southwest has rewarded its investors with 12 years of rising dividends and a current yield of 2.5%.
The company’s current yield is higher than its own five-year average yield. Additionally, the company’s current yield outperforms the average yield of its peers in the Utilities sector. In addition to the above-average yielding dividend income, the company provided its shareholders with asset appreciation of more than 21% in the last 12 months.
The next ex-dividend date is on November 14, 2017, and the pay date will follow approximately two weeks later on December 1, 2017
Southwest Gas Holdings, Inc. (NYSE:SWX)
Founded in 1931 and based in Las Vegas, Southwest Gas Holdings, Inc. is a holding company with interests in two major business segments – Natural Gas Operations and Construction Services. The company provides natural gas distribution through the Southwest Gas Corporation and construction services for the utilities industry the Century Construction Group, Inc. The Southwest Gas Corporation engages in purchasing, distribution and transportation of natural gas in portions of Arizona, California, and Nevada.
Southwest Gas serves large metropolitan areas in those states, such as Phoenix, Tucson and Las Vegas, and is the largest distributor of natural gas in Arizona and Nevada. Additionally, Southwest Gas serves customers in portions of California, including the Lake Tahoe area and the high desert and mountain areas in San Bernardino County. As of September 2017, the company served almost 2 million residential customers. Furthermore, Southwest Gas owns the Paiute Pipeline Company, which owns and operates an interstate pipeline system that extends across Nevada and a Liquid Natural Gas (LNG) storage facility near Lovelock, Nevada.
The Centuri Construction Group, Inc. provides comprehensive construction services to North American utilities, energy and industrial markets. In 2017, the company completed or currently is engaged in 25 different projects throughout the United States. and Canada. The projects included an installation of a gas compression station, sewer verification for a pipeline construction, a main gas transmission pipeline, multiple distribution pipeline networks and a construction of a jet fuel tank terminal at Toronto’s Pearson International Airport.
The company’s current $0.485 quarterly dividend converts to a $1.98 annual dividend distribution and yields 2.54%. This current yield is 10.6% higher than the company’s own 2.3% average yield over the past five years. Additionally, the company’s 2.54% yield outperforms the 2.36% average yield of all companies in the Utilities sector by 7.8%.
The company has been paying dividends since 1956 and rising dividends since 2006. Because of a 7.6% average growth rate per year, the total annual dividend payout rose more than 140% over the past 12 years.
From its 52-week low on October 5, 2016, the share price ascended 34.5% toward its 52-week high on March 3, 2017. After peaking in early March, the share price lost 15.6% and dropped to $72.83 by June 29, 2017. Since late June, the share price recovered some of those losses and closed at $77.82 on October 4, 2017, which is about 9% below the March peak and 21.4% higher than it was one year ago.
Despite some moderate volatility, the combination of asset appreciation and rising dividends provided the company’s shareholders with total returns of 16.1%, 69.5% and 95.2% over the last 12 months, three years and five years, respectively.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.