The board of directors of WEC energy group The WEC plans to raise the dividend for the first quarter of 2022 to 72.75 cents per share, marking an increase of 7.4% and totaling the annual figure to $ 2.91 per share from $ 2.71. This is in line with its target payout ratio of 65-70% of earnings.
The new dividend will be declared at the meeting scheduled for January and will be payable on March 1, 2022 to registered shareholders of WEC Energy on February 14, 2022. If approved, the new dividend yield will be 3.27% over that of the S&P 500 composite. 1.41% on average.
Along with rising dividends, the WEC launched the 2022 earnings forecast in the $ 4.29 to $ 4.33 per share range. The midpoint of the range, $ 4.31 per share, indicates growth of 7.5% from the midpoint of WEC Energy’s initial forecast for 2021. Additionally, it is slightly above the consensus estimate of Zacks of $ 4.29.
Can this dividend be sustained?
WEC Energy has steadily increased its dividends over the past 12 years. WEC plans to increase its dividends in the 6-7% per annum range, subject to board approvals.
WEC’s net cash generated from operating activities in the first nine months of 2021 was $ 2,006.7 million, compared to $ 1,949.7 million in the comparable period of 2020. This outperformance was driven by higher revenues due to operational efficiency and the reopening of economic activities.
WEC Energy strives to grow both organically and inorganically, which increases its performance as well as its cash flow. At the end of the third quarter, WEC had an additional 8,000 electricity customers and 15,000 natural gas customers compared to reported figures for the corresponding quarter of the previous year.
WEC continues to invest in profitable carbon-free production and plans to spend $ 17.7 billion over the period 2022-2026. This systematic investment to strengthen operations and revise rates will provide enough funds to maintain its routine of paying dividends.
Cargo area dividend increases
Along with WEC Energy, other electric utilities are also increasing shareholder value through dividends. These included NRG Energy NRG, PPL Corp. PPL and Duke Energy DUK, all currently wearing a Zacks Rank # 3 (Hold).
In November 2021, NRG Energy increased its 2022 annual dividend by 8%, from $ 1.30 per share to $ 1.40. NRG targets an annual dividend growth rate of 7-9% over the long term, subject to Board approval. NRG has a current dividend yield of 3.65%.
The strong cash flow generation capacity of PPL Corp. allows it to pay constant dividends to its shareholders. Currently, PPL expects a dividend payout ratio of between 60% and 65%. PPL’s current dividend yield is 5.95%.
Duke Energy’s dividend payment history indicates that it has performed consistently and generated sufficient cash flow for a period of time to distribute dividends to its shareholders. DUK paid a dividend of $ 2.34 billion in the first nine months of 2021, up from $ 2.11 billion in the same period last year and currently has a dividend yield of 4.08% .
Zacks’ consensus estimate for 2022 profits for NRG, PPL and DUK is set at $ 5.91, $ 1.53 and $ 5.47, respectively, marking an improvement of 3.3%, 30.5% and 4.8% each of the actual figures for the previous year.
Zacks Ranking and Price Performance
Over the past month, shares of this energy, currently ranked 3rd by Zacks WEC, lost 0.9% from the industrydecrease of 1.5%. You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.
One month price performance
Image source: Zacks Investment Research
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