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PPL’s Dividend Yield, Growth, Payout Ratio, and More

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PPL: Dividend yield

PPL’s dividend yield rose significantly—mainly because of its steep stock fall. It’s currently trading at a dividend yield of 6%, compared to its peers’ (XLU)(IDU) average yield of 4.3%.

The Pennsylvania-based PPL is trading at a higher dividend yield than its peers. However, 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.

PPL yld

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PPL’s management expects its dividend per share to rise ~4% annually for the next few years. Broader utilities’ average dividend growth for the next few years is expected to be around 4%–6% annually. PPL’s earnings per share growth will likely remain at ~5%–6% through 2020—well within the peer average—which will likely facilitate the targeted dividend growth.

In comparison, Xcel Energy (XEL) is currently trading at a dividend yield of 3.4%. In the last five years, Xcel raised its dividends per share by almost 6%, compounded annually.

In 2017, PPL’s payout ratio was 70%—higher than its five-year average payout ratio of 65%. The payout ratio is the portion of the company’s profit distributed to shareholders as dividends.

Top utilities Duke Energy (DUK) and Southern Company (SO) offer a dividend yield of 4.6% and 5.2%, respectively. The Georgia-based Southern Company raised its dividends per share by 3.4%, while Duke Energy’s dividend growth rate came in around 2.9%, compounded annually in the last five years.

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