Xcel's Shareholders Get More - Analyst Blog


The board of directors of electricity and natural gas company Xcel Energy Inc. ( XEL ) has approved a penny increase to the quarterly dividend of the company. The new quarterly dividend will be 28 cents. The revised dividend is payable on Jul 20, 2013, to shareholders of record at the close of business on Jun 20, 2013.

The new annualized dividend rate of the company will be $1.12, reflecting growth of 3.7% from the prior rate of $1.08. The dividend growth rate is at the top end of Xcel Energy's targeted annual growth rate of 2% to 4%. The previous increase in the quarterly dividend rate was on May 16, 2012, when the rate was increased to 27 cents from 26 cents.

Xcel Energy continues to register strong financial performance and has accordingly raised the dividend payment rate by more than 3% annually for the last eight years. In first quarter 2013, an 8% and 7.8% year-over-year increase in contribution from Electric and Natural Gas segments, respectively, shows that systematic investments in its utility operations are yielding positive results for the company.

The company is a strong cash flow generator and boasts of a healthy cash balance. Xcel's net cash flow from operating activities in the first quarter of 2013 was $642.3 million, with $124.4 million used for dividend payouts. Cash and cash equivalents as of Mar 31, 2013 were $112.9 million versus $99.4 million as March 31, 2012.

Like other utility operators Xcel Energy too has a long history of consistently paying dividends. The company's strong cash flow generating ability will easily provide the extra $4.9 million required for the increased dividend payment.

In addition to Xcel Energy, other utility operators have also hiked their quarterly dividend rate. American Electric Power Co . ( AEP ) increased its quarterly dividend rate by 4% to 49 cents. ALLETE Inc. ( ALE ) hiked the quarterly rate by 3.3% to 47.5 cents. Chesapeake Utilities Corporation ( CPK ) raised its quarterly dividend rate by 5.5% to 38.5 cents.

Based in Minneapolis, Minn., Xcel Energy is a U.S. electricity and natural gas company, with operations in eight Western and Midwestern states. Xcel Energy currently retains a Zacks Rank #3 (Hold).

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XCEL ENERGY INC (XEL): Free Stock Analysis Report

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

This article appears in: Investing , Business , Stocks

Referenced Stocks: AEP , ALE , CPK , XEL



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