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PPL Has a Premium Yield, Dull Dividend Growth

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PPL’s dividend

PPL (PPL) declared a quarterly dividend of $0.40 per share on August 25, 2017. It has September 7 as its ex-dividend date. The dividend will be paid on October 2, 2017.

Considering the annualized dividends of 2017, PPL has increased its per share dividend 4% compared to the previous year. PPL’s dividend growth seems to be close to the lower end of the industry average dividend growth of 4%–6%.

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PPL’s dividend yield

PPL is one of the top-yielding utility stocks in the sector at 4.0%. Currently, the Utilities Select Sector SPDR ETF (XLU) yields 3.5%. PPL’s relatively higher yield is notable, but it’s comparatively lower than some top utility giants. Southern Company (SO), the second-largest regulated utility in the country, yields 4.7%—the highest among the top utility stocks. Entergy (ETR) and FirstEnergy (FE) yield ~4.4%.

PPL’s peers Xcel Energy (XEL) and Consolidated Edison (ED) both yield 3.3%.

Dividend growth

Although PPL is trading at a superior dividend yield compared to its peers, its dividend growth rate in the last few years was on the lower side. Its per share dividends rose 1.8% compounded annually in the last five years. In comparison, the Utilities Select Sector SPDR (XLU) increased its per share dividend 4.2% compounded annually during the same period.

Top utilities like NextEra Energy (NEE) and Dominion Energy (D) raised the per share dividends 10% and 8%, respectively, compounded annually, in the last five years.

Read NextEra Energy or Dominion: Which One Has an Attractive Dividend? to learn more.

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