Duke Energy Corporation
) continues with its steady effort towards maximization of
shareholders' wealth through payment of dividends and increases the
same at regular intervals. The board of directors has raised its
quarterly cash dividend rate by around 2% sequentially to 79.5
cents per share. The revised dividend will be paid on Sep 16, 2014
to shareholders of record as of Aug 15.
On an annualized basis, Duke Energy's dividend rate will come to
$3.18 per share. The company's current annual dividend yield will
be 4.3%, significantly higher than the sector average.
Duke Energy has a stable dividend payment history distributing
quarterly cash dividend for 88 consecutive years. The company hiked
its quarterly dividend rate every year since Jan 2007 after the
spin-off of Spectra Energy.
The last quarterly dividend hike was made in May 2013. The
quarterly dividend has increased around 2% to 78 cents per share
from the previous payout.
For 2014, Duke Energy plans to achieve the long-term dividend
payout ratio in the range of 65% - 70% of its adjusted diluted
earnings per share.
Duke Energy maintained a stable financial position backed by strong
cash generation capacity. As of Mar 31, 2014, the company had cash
and cash equivalents of around $1.5 billion. In the first three
months of 2014, Duke Energy's operating cash flow was roughly $1.37
billion. A favorable financial position supports the company's
practice of paying steady dividends.
Duke Energy also utilizes substantial amount of funds for its
growth projects. The company invested around $1.27 billion in
first-quarter 2014 and plans to spend $16 - $20 billion between
2014 and 2018. A major portion of funds is expected to be allocated
for new generation and infrastructure development projects. The
scheduled completion of these projects will enable Duke Energy to
meet increasing customer demand, thereby improving future cash
Duke Energy currently has a Zacks Rank #3 (Hold). However, some
better-ranked stocks in the same industry include
NRG Energy, Inc.
Wisconsin Energy Corporation
). All the stocks carry a Zacks Rank #1 (Strong Buy).
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