Newark, NJ based utility Public Service Enterprise Group ( PEG ) announced that its board of directors has approved of an increase in the quarterly dividend rate by 2 cents. The revised quarterly dividend will be 39 cents, payable on Mar 31, 2015, to shareholders of record at the close of business on Mar 10, 2015.
The annualized payout amounts to $1.56 per share, up 5.4% from the prior rate. The current annualized dividend yield is 3.9%, higher than the industry average of 2.14%. The increase in distributable income speaks of the company's successfully executed investment growth strategy.
Public Service Enterprise has been increasing its dividend rate on a yearly basis from 2004. This is a sign of financial strength and the company's ability to generate consistent cash flow to fund shareholder friendly moves.
This New Jersey based utility has a strong portfolio of regulated and unregulated assets that provide a stable earnings base. Public Service Enterprise's earnings have surpassed the Zacks Consensus Estimate in three out of the last four quarters, with a positive average earnings surprise of 1.15%.
Cash flow from operating activities at the end of the first nine months of 2014 was $2.53 billion, up over the prior year. During the first nine months of 2014, the company utilized $56 million for dividend payouts. The strong cash flow generating capability will aid the company to fund incremental dividends.
Public Service Enterprise Group currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the space include Huaneng Power International, Inc. ( HNP ), Edison International ( EIX ) and Consolidated Edison, Inc. ( ED ). Huaneng Power sports a Zacks Rank #1 (Strong Buy), while Edison International and Consolidated Edison, Inc. have a Zacks Rank #2 (Buy).