Recently, natural gas-focused energy company
) increased its quarterly common stock dividend by 5 % to 17 cents
per share (68 cents per share annualized). The new dividend will be
paid on September 10, 2012 to shareholders of record as of August
Questar's latest payout hike marks the 40th dividend increase in as
many years. The company has paid dividends in each of the last 271
The strength of Questar's business model reflects the company's
commitment towards returning value to shareholders with its strong
cash generation capabilities. Prior to this revision, the company
had increased its quarterly dividend by 1 cent per share in
Questar has a strong capital deployment policy through regular
share repurchase and payment of dividends. During the second
quarter of 2012, the company repurchased 2.62 million shares for an
aggregate cost of $52.2 million at an average price of $19.96 per
Moreover, it has paid common stock dividends amounting to $57.8
million to shareholders during the first half of 2012.
We believe that the increase in dividend and share repurchase
programs will boost investors' confidence in the stock, thereby
driving share value.
Founded in 1922, Salt Lake City, Utah-based Questar Corporation is
a natural gas-focused energy company with three principal
subsidiaries - Wexpro Company, Questar Pipeline, and Questar Gas
Questar is characterized by a cost-effective business strategy that
generates lucrative return on equity. The company is also
consistently broadening its customer base and enjoys an enviable
market share as compared to its peers which include
AGL Resources, Inc.
National Fuel Gas Company
Atmos Energy Corporation
Overall, we believe the company will be able to generate meaningful
earnings and dividend growth in the coming years. An above-average
credit quality adds to the positive sentiment.
Shares of Questar currently carry a Zacks #3 Rank, which translates
into a short-term Hold rating. Considering the fundamentals, we are
also maintaining our long-term Neutral recommendation on the
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