) has announced it would increase the quarterly dividend rate to 62
cents per share, up approximately 3 cents from the current payout
of approximately 59 cents per share.
The proposed hike would bring the annual dividend to $2.48, up
5.5% from the previous payout. The increased quarterly dividend
will be paid on October 15, 2012 to shareholders of record at the
close of business on September 17, 2012.
In May 2011, the company had increased its quarterly dividend by
5% to approximately 59 cents per share. In December 2011, one of
the company's peers,
Wisconsin Energy Corporation
) had announced a quarterly dividend increase to 30 cents per share
versus its previous payout of 26 cents per share.
The company had released its first quarter 2012 earnings in
April. At the end of first quarter 2012, cash and cash equivalents
were $57 million, down from $197 million at the end of first
quarter 2011. Despite a weak liquidity position, the company
continues to maintain its trend of increasing the dividend and
making capital investments. Moreover, in order to address the
provisions of Michigan Public Act 295 of 2008, the company is
planning to implement a 20-year renewable energy plan to deliver
cleaner renewable electric generation to its customers and meet the
state and national goals of increasing energy independence.
The company's stable utility business and a complementary
non-utility business allow DTE Energy to engage in shareholder
friendly moves. Going forward, we expect the growth momentum to be
maintained by higher rates for its regulated business, and an
industry-high dividend yield.
However, we are currently concerned about the present
unfavorable macro backdrop, lower demand for electricity, the
dismal Michigan economy and pending regulatory cases. The company
presently retains a short-term Zacks #3 Rank (Hold) that
corresponds with our long-term Neutral recommendation on the
Detroit, Michigan-based DTE Energy is a holding company with
subsidiaries engaged in regulated and unregulated energy
businesses. Detroit Edison Company and Michigan Consolidated Gas
Company are its largest regulated subsidiaries. DTE Energy also has
four non-utility segments engaged in a variety of energy-related
business. DTE Energy's unregulated businesses include gas pipelines
and storage, unconventional gas exploration, development and
production, power and industrial projects and coal transportation
and marketing, and energy marketing and trading operations.
DTE ENERGY CO (DTE): Free Stock Analysis Report
WISC ENERGY CP (WEC): Free Stock Analysis
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