Northeast Utilities Pays Out Raised Dividend In March


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Northeast Utilities ( NU ) -- New England's largest public utility, with 3.6 million customers in Connecticut, Massachusetts and New Hampshire -- announced an increase in its quarterly dividend earlier this month.

The new dividend is 39.25 cents per share and is payable on March 31 to shareholders of record March 3. It represents a 6.8% increase from the previous quarterly dividend of 36.75 cents.

The company's CEO, Thomas J. May, says the increase demonstrates the confidence the company has in its business model as a regulated utility.

Northeast sells natural gas and electricity, and heightened demand brought on by multiple bouts of severe cold that has gripped the northeastern U.S. this winter has put a strain on the region's ability to keep the lights on and the heaters running.

The situation is so extreme that grid operators have been forced to fire up some infrequently used turbines that burn jet fuel.

The dividend announcement was Feb. 4. On Feb. 6, the company announced earnings that missed analysts' estimates, but beat on revenue.

EPS was 57 cents, a 2% increase from the year-ago quarter. Estimates were a penny higher. Revenue was 6% higher. Analysts expect a 1% increase in the next report. The company set 2014 guidance at $2.60 to $2.75 a share.

Earnings have been growing at Northeast Utilities, if slowly and a little erratically. The five-year annualized growth rate is 7%. The five-year Earnings Stability Factor is 6 on a 0 to 99 scale where low numbers correspond to steady earnings growth.

The new dividend equates to $1.57 a share annually, which works out to a 3.5% yield.

Northeast's stock has been moving generally sideways for the past year. Since May, it has been going through a saucer-like consolidation that corrected only 14%.

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

This article appears in: Personal Finance , Investing Ideas

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