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Entergy’s Dividend Yield: Historical versus Forward

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Entergy’s forward dividend yield

Entergy (ETR) was trading at a forward dividend yield of 4.7% on March 9, 2016. Its three-year historical average yield is 4.8%. The fall in Entergy’s dividend yield since the beginning of 2016 was in line with the utility sector (XLU). The forward dividend yield of a company is calculated by dividing its estimated one-year future dividend per share by its market price per share.

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Peer performance

The graph above compares Entergy’s forward dividend yield with its historical average dividend yield. Exelon (EXC) has a forward dividend yield of 3.8%, while FirstEnergy (FE) has a yield of 4.2%.

Utilities’ performance is gauged by the Utilities Select Sector SPDR ETF (XLU). It is currently trading at a forward dividend yield of 4.7%. Entergy forms 2.3% of XLU. Exelon and FirstEnergy account for 4.6% and 2.5% of XLU, respectively.

Hybrid utilities (VPU) have higher yields than regulated ones. The stocks of hybrid utilities corrected sharply with the weak earnings, which ultimately pushed their yields up. The earnings of these hybrid utilities were hit by poor power prices led by low natural gas prices.

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