) announced that its board of directors has approved a 5%
increase in the dividend on shares of the company's common stock
to $2.52 per share, on an annualized basis, from $2.40 per share.
The first quarterly installment of the new dividend is payable on
Apr 15, 2013, to shareholders of record on Mar 28, 2013.
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The underlying strength of the business and management's
inclination to return value to shareholders drove the dividend
hike. Sempra Energy is one of the high-yielding (3.13%) stocks
among its peers in the utility industry. Peers such as
MDU Resources Group Inc.
) yield a much lower dividend yield of 2.85%, 1.21% and 0.20%,
Sempra Energy is a Southern California-based energy services
holding company involved in the sale, distribution, storage, and
transportation of natural gas. Its subsidiary Sempra LNG
develops, owns and operates liquefied natural gas receipt
terminals serving North American markets. Sempra competes with
other companies for construction and operation of liquefied
natural gas receiving terminals and purchase of the same.
Sempra Energy's diversified basket of businesses insulates its
operations to a significant degree from regulatory rate risks,
compared to integrated utility peers.
Sempra Energy appears to be well positioned given stable earnings
through its utility subsidiaries, which cater to more than 20
million customers in central and southern California. The company
is also implementing infrastructure improvement programs focused
mainly on system reliability, smart grid technology to comply
with California's renewable energy mandate.
Positives in Sempra Energy's story include steady progress at its
Sunrise Powerlink transmission line, ongoing installations of
smart meter, substation expansions, higher utility operating
margins from regulatory rate hikes, and developing renewable
power projects in the Pacific Southwest. Sempra Energy's move to
divest its commodities trading businesses to align its assets
towards regulated utility is a big positive for the company in
the long term. Currently Sempra Energy holds a Zacks Rank #2