PPL (PPL) is currently trading at a dividend yield of 5.1%. We are analyzing the top five S&P 500 utilities in terms of yields in this series. PPL’s yield was higher than the broader utilities in the last five years as well. Its five-year historical average yield is ~4.4%, which highlights its dividend stability.
Even though PPL is presently trading at a premium dividend yield compared to its peers, its per share dividend growth in the last few years was on the lower side of the industry average. Its per share dividends rose 1.8% compounded annually in the last five years.
PPL management is aiming to raise its per share dividends 4% annually through 2020. That’s far lower than top utilities such as NextEra Energy (NEE) and Dominion Energy (D) with expected annual dividend growth of 13% and 10%, respectively. PPL’s 4% to 6% per year dividend increase is in line with those of peers. PPL management aims for per share earnings growth of 5%–6% per year for the next few years.
PPL’s operations in the United Kingdom are responsible for more than half of its total earnings. The volatile exchange rate movements after Brexit have influenced PPL’s market performance in the last few months. In the last 12 months, PPL stock lost 12%, while peers on average rose 7%.
To learn more about top US utilities (XLU), read An Investor’s Guide: A Look at the 10 Largest S&P 500 Utilities.