American Electric Power (
) can make a claim few companies can: It has paid a dividend for
more than 400 straight quarters.
That's more than a century of dividends. They've been rising
in the past few years, but haven't been going straight up.
Columbus, Ohio-based AEP sells electricity in Arkansas,
Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma,
Tennessee, Texas, Virginia and West Virginia.
It sells both retail and wholesale power, has 38,000 megawatts
of generating capacity and more than 40,000 miles of transmission
lines. It produces power using coal and lignite, natural gas, and
nuclear and hydroelectric power.
AEP was founded in 1906 as the American Gas and Electric Co.,
bringing together the utilities of a hodgepodge of small towns
stretching from the Atlantic Ocean to Illinois. Over the years,
it has bought and sold a number of operations.
When the federal government broke up the public utility
holding companies in 1935, AEP was forced to sell parts of its
operation, but kept its core holdings.
AEP paid out 60 cents a share in quarterly dividends in 2003,
but dropped it to 35 cents in 2004. It's been rising since then,
but has not yet gotten back to its previous level.
Dividends have just hit 50 cents a share, which works out to a
4% annual yield. The company has a five-year dividend growth rate
of 4%, not particularly impressive compared to some other utility
It had three straight years of earnings decline from 2002 to
2004, where earnings dropped 15%, 12% and 8%. Since then, it has
only had one significant down year, 2009, when earnings fell 7%.
Since then, earnings have been growing, at best, in the low
single digits. EPS shrank fractionally in 2012.
It has a five-year Earnings Stability Factor of 3 on a 0 to 99
scale, where low numbers equate to steady earnings growth.
It's been reducing its debt-to-equity ratio from 114% three
years ago to 103% two years ago to 102% last year.