Dominion Resources Could Be a Great Dividend Option
Dominion Resources’ dividends
Dominion Resources (D) paid $0.76 per share in dividends in 1Q17—an increase of 8% from its dividends in the previous quarter. Dominion Resources has a strong dividend payment history. Although it’s currently trading at a dividend yield of 3.9%, not among the highest in the industry, its dividend growth rate is one of the steepest in the sector.
Compared to its peers, Duke Energy (DUK) is currently trading at a dividend yield of 4.1%, while Southern Company’s (SO) yield is at 4.5%. Although Dominion’s yield isn’t among the highest, it’s higher than the Utilities Select Sector SPDR (XLU) at 3.5%.
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Dominion’s dividend growth
In the last five years, Dominion Resources’ dividends have grown more than 7% compounded annually. On the other hand, utilities at large increased their dividends 4.2% compounded annually during the same period. Dominion’s above-average dividend growth is fueled by its above-average earnings growth.
Dominion obtains more than 85% of its total earnings from regulated operations. The company has relative earnings stability, which ultimately bodes well for stable dividends.
Dominion Resources’ dividends are expected to grow 8% annually, while Southern Company and Duke Energy’s dividends are expected to grow ~5% in the next few years. In comparison, NextEra Energy (NEE) is expected to outwit its peers. It expects higher dividend growth in the future. Its dividends are expected to increase 13% in the next few years—more than double the industry average.
To learn more, read NextEra Energy and Dominion Resources: Dividend Profiles.