Analyzing PPL from a Dividend Investor’s Perspective
PPL (PPL) is one of the highest yielding utilities in the sector with a yield of 4.2%. In comparison, the Utilities Select Sector SPDR (XLU) yields nearly 3.5%, while large-cap peers Southern Company (SO) and Duke Energy (DUK) are trading at dividend yields of 4.1% and 4.3%, respectively. The broader market’s (SPX-INDEX) yield is near 2%.
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Low dividend growth
Although PPL is currently trading at a premium dividend yield, its dividend growth rate in the last few years was on the lower side. In the last five years, its per share dividends rose 1.6% compounded annually.
Many utilities showed handsome dividend growth in the last five years. Dominion Resources’ (D) dividends rose 7.3%, while NextEra Energy’s (NEE) dividends rose 9.6% in the last five years.
As you can see in the above graph, PPL expects its dividends to grow 4% compounded annually—in line with the industry average.
Importantly, utilities such as NextEra Energy and Dominion Resources expect to increase their dividends 10% in the next few years—more than double the industry average.
To learn more about NextEra Energy’s dividends, read Why NextEra Energy Could Be a Sensible Dividend Option.