Dominion Resources Inc.
) board of directors announced a fresh dividend outlook which
includes the achievement of a targeted dividend payout ratio of
65% to 70%. The company also hiked its dividend rate to $2.25 per
share for 2013 reflecting a 6.6% increase from $2.11 per share in
The hiked quarterly dividend payment of 56.25 cents per share
will be paid in March 2013 subject to the board statement in
January 2013. The current dividend policy is a replacement of the
one set in December 2010 which involved the realization of a 60%
to 65% payout ratio.
We believe the current dividend policy would win the
confidence of the company's shareholders and will add value to
their wealth accretion.
Furthermore, this marks the 10th successive annual dividend
hike. Since 2006, the dividend rate increased almost 63%.
Dominion's strategy to focus on growth of its regulated business
and its diminishing reliance on commodity based earnings were the
main drivers behind the proposed dividend rise.
The company's current dividend yield rate is 4.04%, higher
than its peer
) dividend yeild of 3.89%.
The company in the third quarter 2012 saw operating cash flow
increase to $3.5 billion from $2.4 billion in the year-ago
period. We believe the solid operating cash flow profile and
available liquidity of approximately $2.1 billion will amply meet
the company's expected cash requirements and finance its future
growth prospects for the next couple of years.
Dominion's earnings per share stood at 92 cents in the third
quarter, down 3.2% from the year-ago figure and 5.2% from the
Zacks Consensus Estimate. The company anticipates fourth quarter
2012 operating earnings in the range of 65 cents to 75 cents per
Another utility provider
OGE Energy Corporation
) recently raised its quarterly dividend by 6.37% to 41.75 cents
per share from the previous level of 39.25 cents per share. The
annualized dividend will be $1.67 per share from the earlier
payout of $1.57 per share.
The Zacks Consensus Estimates for the fourth quarter and full
year 2012 are currently pegged at 69 cents and $3.06 per share,
Dominion Resources along with its subsidiaries engages in
producing and transporting energy in the United States. It
operates in three segments: Dominion Virginia Power, Dominion
Generation and Dominion Energy. The company presently has a
short-term Zacks #3 Rank (Hold rating).
DOMINION RES VA (D): Free Stock Analysis
NISOURCE INC (NI): Free Stock Analysis Report
OGE ENERGY CORP (OGE): Free Stock Analysis
To read this article on Zacks.com click here.