ConEdison Has Paid Rising Dividend Every Year for More Than Four Decades (ED)
By: Ned Piplovic,
Forty-three consecutive years of dividend payments makes Consolidated Edison, Inc. (NYSE: ED) one of only 51 companies that qualify as a Dividend Aristocrat, a group of S&P 500 companies with market capitalizations of more than $3 billion and a streak of boosting annual dividends for at least 25 consecutive years.
This impressive dividend payout record has helped the company maintain an overall upward trend over the past 30 years, despite several significant sell-offs and price fluctuations in that time. At current share price levels, Consolidated Edison (also known as ConEdison, or ConEd) pays a dividend yield of 3.6%.
The company’s next ex-dividend date will occur on May 15, 2018, and ConEd will distribute the next round of dividend payments on the pay date of June 15, 2018 to all its shareholders prior to the aforementioned ex-dividend date.
Consolidated Edison, Inc. (NYSE:ED)
Based in New York, New York and founded in 1884, Consolidated Edison, Inc. is a diversified utility company that engages in regulated electric, gas and steam delivery businesses. The company offers electric services to approximately 3.4 million customers in New York City and Westchester County; gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens and Westchester County; and steam to approximately 1,600 customers in Manhattan. Additionally, the company supplies electricity and gas to approximately 300,000 customers in southeastern New York and northern New Jersey.
As mentioned above, ConEd has paid a rising dividend continuously over more than four decades. Over the past two decades (1998-2018), the company raised its total annual dividend amount at an average growth rate of 3.2% per year, which translates to a total payout increase of 79% over the past 20 years. While the annual distribution increased by $0.02 for many years, the last several years have seen growth of anywhere from $0.04 to $0.10 per share, so more recent investors have been seeing a higher level of dividend increases.
In the previous quarter of 2018, ConEdison hiked its quarterly dividend 3.6% from the $0.69 payout in the last quarter of 2017 to the current $0.715 per share amount. This current quarterly amount converts to $2.86 on an annualized basis and a forward yield of 3.6%. Compared against the average yield of ConEdison’s peers in the Utilities sector, this yield is 35.7% higher, but it is slightly below the 3.9% simple average yield of all the companies in the diversified market segment.
ED shares rose more than 10% between early May 2017 and December 2017, when the share price reached its 52-week high of $89.70. However, the share price reversed direction after peaking in early December, gave back all gains since May and dropped to a 52-week low of $73.73 on March 2, 2018 — a total loss of more than 17% from the December peak.
Since bottoming out at the beginning of March, the share price has been rising again and closed on May 4, 2018 at $79.25, a 7.5% gain. This closing price was marginally lower than the $79.39 share price from 12 months earlier and 11.6% below the December peak price. However, over the past five years, this closing price represents growth of nearly 30%.
The recent share price sell-off limited shareholder’s total return over the past 12 months, but the total return over the past three years was nearly 10-fold higher, and the five-year total return came in slightly above 45%.
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