Duke Energy Corp Raises Quarterly Dividend by 3.6%
Utilities have a reputation for being stodgy investments that generate reliable income—but not much excitement. Duke Energy Corp (NYSE:DUK) stockholders might beg to differ.
On Monday, the southeastern utility declared a quarterly cash dividend of $0.855 per share. The move represents a 3.6% increase compared to its current payout, which will be paid on September 16, 2016 to shareholders of record on August 12. (Source: “Duke Energy Increases Quarterly Dividend Payment by 3.6%,” Duke Energy Corp, July 11, 2016.)
“Our dividend increase reflects our company’s financial strength and long-term shareholder value,” wrote Duke’s chairman, president, and chief executive officer, Lynn Good. “Both of which result from our solid commitment to outstanding customer service.” (Source: Ibid.)
“For 90 consecutive years, Duke Energy’s dividend has been as reliable as the energy we provide,” Good added. “Our dividend increase reflects our company’s financial strength and long-term shareholder value—both of which result from our solid commitment to outstanding customer service.” (Source: Ibid.)
Duke Energy has a solid track record when it comes to dividends. The company has been paying a quarterly dividend for 90 consecutive years. Moreover, its payouts have been increasing. Since 2013, Duke Energy’s quarterly dividend has increased by 11.8%.
A dividend hike is certainly a welcoming move for Duke Energy’s stock investors. Due to weakened demand from the mild winter, the company’s latest results turned out to be less than satisfactory. In the first quarter of 2016, Duke’s operating revenue fell 7.3% year-over-year to $5.62 billion. Adjusted earnings per share also dropped by 8.9% year-over-year to $1.13. (Source: “Duke Energy Reports First Quarter 2016 Diluted Earnings,” Duke Energy Corp, May 3, 2016.)
However, the hiccup in the first quarter likely won’t continue. Other than weather conditions, Duke Energy’s financial results in the first quarter were also impacted by merger-related expenses. In particular, the $74.0 million it spent on mergers was significantly more than the $13.0 million it spent in the year-ago period.
With most of the company’s adjusted net income coming from the regulated utilities segment, it’s safe to say that Duke Energy’s solid track record in dividends will likely continue.