Public Service Enterprise Group Offers 4.7% Dividend Boost (PEG)
By: Ned Piplovic,
Public Service Enterprise Group, Inc. (NYSE:PEG) boosted its quarterly dividend distribution 4.7% versus the previous period and provides its shareholders with a 3.6% dividend yield.
The company’s share price dropped considerably during December 2017 and suffered additional losses with the rest of the market at the end of January 2018. However, over the past 12 months, the share price still managed to eke out a double-digit percentage gain and to combine with the dividend income for a double-digit percentage total return as well.
Without a single annual dividend cut in the past two decades and a 110-year long record of distributing dividends, the company has a long record of dispensing steady income to its investors. The company will distribute the next dividend on its upcoming March 30, 2018, pay date to all its shareholders of record prior to the March 7, 2018, ex-dividend date.
Public Service Enterprise Group, Inc. (NYSE:PEG)
Headquartered in Newark, New Jersey, the company dates its origins back to the formation of the Public Service Corporation in 1903 and the current Public Service Enterprise Group Incorporated was founded as a holding company in 1985. Through its subsidiaries, the company operates an energy company primarily in the Northeastern and Mid- Atlantic United States. The company operates nuclear, coal, gas, oil-fired and renewable generation facilities with a generation capacity of almost 12 gigawatts. Additionally, the company sells and distributes electricity to 2.2 million customers, natural gas to 1.8 million customers and other energy-related products. To support its distribution operations, the company owns and operates 24,000 circuit miles and more than 850,000 electric poles, as well as 47 switching stations and 246 substations. The company manages its gas distribution with 18,000 miles of gas mains, 12 gas distribution headquarters, two sub-headquarters and 61 natural gas metering stations.
The company announced its seventh consecutive annual dividend hike with a 4.7% payout enhancement from $0.43 in the previous period to the current $0.45 quarterly payout. This current quarterly payout yields 3.6% and converts to $1.80 annualized. The company’s current yield is within 4% of its five-year average yield of 3.8%.
While the company’s current streak of raising annual dividends is only six consecutive years, the Public Service Enterprise Group has a long-term record of providing escalating dividend income to its shareholders. Over the past 20 years, the company managed to avoid any dividend cuts and failed to raise its annual dividend only once. Over those 15 consecutive years, the company enhanced its annual dividend at an average growth rate of 3.5% per year. The growth rate only accelerated in the more recent years. Since 2011 – when the current consecutive annual hikes streak began – the company’s annual dividend growth rate rose to 4% per year and exceeds 5% over the past three years.
The company’s current 3.6% dividend yield is approximately 7% below the 3.94% average of all companies in the Diversified Utilities segment. However, Public Service Enterprise Group’s current yield outperformed the 2.55% average yield of the overall Utilities sector by more than 43%.
While declining slightly throughout the first half of 2017, the share price experienced a quick surge in the second half of the year, before dropping again in late January 2018 during the overall market sell-off. The share price dropped 5.6% from $44.33 on February 21, 2017, to its 52-week low of $41.85 on July 11, 2017. After that slow decline, the share price reversed direction and rose 15.7% to its 52-week high of $53.07 by December 1, 2017. After that peak, the share price lost 7.2% in one month and dropped to $49.25 by January 4, 2018. The company’s share price regained almost 70% of its December losses by the end of January, before plunging almost 10% in just one week. The share price has been rising again and closed on February 20, 2018, at $44.33, which is still 7.5% short of the December 2017 peak, but 11.2% above its level from 12 months earlier and almost 18% above the 52-week low from July 2017.
Even with the drops in December 2017 and the first week of February 2018, the share price combined with the increasing dividend distributions for a 17.2% total return over the past year, a 38% total return over the past three years and a total return of more than 84% over the past five years.
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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.