DTE Energy Aims For Steady Earnings, Dividend Growth


DTE Energy ( DTE ), a Detroit-based utility, recently said it expects to raise its dividend in line with its target of 5% to 6% annual earnings growth.

The statement was made June 19, when the company boosted its quarterly dividend by 5.3% to 69 cents a share. The dividend is payable Oct. 15 to shareholders of record Sept. 15.

DTE has now boosted the payout for five consecutive years, with an average increase of 5.4%. The annual payout, amounting to $2.76 a share, is good for a yield of 3.6% at the current share price, almost double the S&P 500 average of 1.9%.

The dividend hike reflects management's "confidence in DTE's long-range growth plan," the statement said.

Profit this year is expected to rise 8% to $4.42 a share, topping the company's target. But profit for 2015 is seen rising just 4%.

DTE delivers electricity and natural gas to customers in Southeastern Michigan. It also operates gas pipelines and storage facilities and is engaged in energy trading. And it's moving into renewable energy sources such as wind power and biomass.

"A favorable financial position, systematic investments in infrastructure projects and focus on renewable ventures will likely boost the company's future performance," Zack's Equity Research said in a note Monday.

However, it said changes to government regulations and volatile commodity prices pose risks to DTE's growth target.

This year, DTE's share price has fared well, rising 14% compared with the S&P 500's 7% gain. The stock is working on a flat base with a possible buy point at 79.55.

DTE will announce second-quarter earnings before the market opens July 25.

Profit for the period is expected to rise 19% to 74 cents a share, slowing somewhat from a 37% jump in the prior quarter.

Revenue for the period is forecast to rise 3% to $2.29 billion.

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

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: DTE

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