Consolidated Edison (ED) announced that its board of directors has approved an increase in the quarterly dividend rate by 3.1%. The quarterly dividend will be 65 cents, up from the prior payout of 63 cents. The raised dividend will be paid on Mar 15, 2015, to shareholders of record as of Feb 18, 2015.
Consolidated Edison has not only been consistently paying out dividends but has also increased the rate for the last 40 years. In Jan 2014, Consolidated Edison raised its quarterly dividend by 2.4% sequentially to 63 cents. The 41st consecutive annual hike will take the company’s dividend yield to 3.8%, much higher than the industry average of 2.28%.
The company exited third quarter 2014 with net cash from operating activities of $1.75 billion compared with $1.24 billion in the year-ago period. This utility company’s capital investments must have been yielding a superior rate of return leading to regular dividend hikes as well as more investments in growth projects.
Consolidated Edison’s consistent performance allows it to pay its stockholders between 60% and 70% of its earnings. Earnings of the company have consistently surpassed the Zacks Consensus Estimate in the last four quarters with an average beat of 9.48%.
In addition to Consolidated Edison, another utility operator Wisconsin Energy (WEC) also increased its quarterly cash dividend by 8.3% to 42.25 cents for the fourth quarter of 2014. This has resulted in an annual dividend increase of 13 cents to $1.69 per share.
Consolidated Edison currently has a Zacks Rank #2 (Buy). Other well-ranked stocks in the utility space include Huaneng Power International, Inc. (HNP) and PG&E Corporation (PCG). Both sport a Zacks Rank #1 (Strong Buy).
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