Let’s discuss what could affect Xcel Energy’s (XEL) dividends. Xcel Energy aims to increase its long-term per-share earnings by 5%–6%, bringing its targeted per-share dividend growth to similar levels.
Xcel Energy’s increased focus on expanding its renewables capacity and multiyear rate plans could boost its earnings over a longer term. Xcel Energy is planning to invest ~$20 billion through 2020, which is expected to increase its rate base by ~6%, compounded annually.
The chart above compares Xcel Energy and peers’ stock price movements, along with broader markets. In the last year, Xcel Energy stock has gained ~3%, while broader utilities (XLU) (IDU) have fallen 3%.
Let’s consider Xcel Energy’s total returns. Xcel Energy has returned 6% while broader utilities have returned ~1% in the last year. Xcel Energy has returned 12%, compounded annually, in the last five years, while peers have returned 10% on average. Broader markets have returned almost 15%. Total returns consider stock appreciation and dividends paid.
It should be noted that while Xcel Energy’s dividend growth has been healthy, market performance has been a major contributor to its total returns in the last five years. For more about utilities’ recent performance and their outlook, read Utilities’ Recent Performance, Volatility Trends, and Charts.