AGL Resources Has Raised Dividend 12 Years In A Row


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The stock price of Atlanta-basedAGL Resources (AGL) advanced 18% last year, which, along with a hefty dividend, made for a nice year for shareholders.

AGL Resources is an energy services company with operations in natural gas distribution, retail operations, wholesale services, midstream operations and cargo shipping. The company has utility customers in Illinois, Virginia, Maryland, Georgia, New Jersey, Florida and Tennessee.

About 52% of U.S. households use natural gas for heating.

So far this year, the stock is down less than 1% vs. gains of 2% to 4% in the major indexes.

In early February, the company announced an increase in the quarterly dividend from 47 cents a share to 49 cents a share.

The annualized yield is 4.2%.

AGL Resources has an unbroken streak of paying dividends since 1948 and has raised the payout for 12 consecutive years.

Earnings rose 6% in 2013 on an 18% increase in revenue. At the Feb. 5 earnings call, Chief Financial Officer Drew Evans said colder weather than normal in 2013 helped year-over-year results. (The year 2012 featured record warm temperatures.)

AGL uses OTC weather derivatives to lessen the impact of weather changes.

The Street expects EPS to grow 13% this year, which would be the fastest growth since 2003.

AGL's five-year Earnings Stability Factor is 7 on a gauge that runs from 0 (calm) to 99 (wild).

One drawback is pretax margin. It was 11% in 2013, down from 16% and 12% in the previous two years. A second drawback is the D in Accumulation/Distribution Rating, which points to institutional selling.

In late 2011, AGL merged with Illinois-based Nicor, doubling the number of AGL's utility customers.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance Investing Ideas
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