Xcel Energy’s Dividends: What You Need to Know Now
Xcel Energy’s dividends
Xcel Energy (XEL) has a strong dividend profile that outshines many of its peers. It increased its quarterly dividends from $0.34 to $0.36 per share in 1Q17, and this increase implies an annualized dividend payout of $1.44 per share in 2017—almost 6% growth, annually, as compared to 2016.
Xcel Energy has raised its dividends for the past 13 years. In the past five years, Xcel Energy’s per-share dividend grew 5.5%, compounded annually, while the average dividend growth rate over the past five years for utilities at large stayed close to 4%.
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Xcel Energy is now trading at a dividend yield of 3.2%. Although this yield isn’t the best in the industry, XEL’s dividends have been relatively stable, and its dividend growth has been healthy.
By comparison, the Utilities Select Sector SPDR (XLU) has a yield of 3.3%. Utility giants such as Duke Energy (DUK) and Southern Company (SO) are trading at dividend yields of 4.1% and 4.5%, respectively, while NextEra Energy is (NEE) at 3%. The SPDR S&P 500 (SPY) (SPX-INDEX) have a dividend yield of 2%. Notably, the utility sector makes up nearly 3.2% of SPY.
Xcel Energy’s dividends are expected to grow 6% annually for the next few years, while Southern Company and Duke Energy’s dividends are estimated to grow 4% over the next few years.
To learn more about Xcel Energy’s dividends, read Market Realist’s series Top to Bottom: Analyzing Xcel Energy’s Dividend Profile. Continue to the next part for a look at total returns.