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Factors that Could Drive the Dividend Growth of SCG

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What is the dividend outlook for SCG?

SCANA Corporation’s (SCG) present dividend yield of 6.5% is driven by flat dividend growth and its price loss. Its dividend grew 6.0% and 7.0% in 2016 and 2017, respectively. The rise in its dividend yield for 2017 was driven by its price loss. Its dividend is projected to record flat growth in 2018.

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What is the projected dividend payout for SCG?

SCANA Corporation (SCG) had a dividend payout of 55.0% in 2016. It has projected dividend payouts of 59.0% and 79.0% in 2017 and 2018, respectively. The company has been unable to generate positive free cash flow due to high capital expenditures relative to its operating free cash flow.

What drove SCG’s operating revenue growth?

SCG’s operating revenues fell 3.0% in 2016 before growing 2.0% in 9M17. Its gas-regulated and gas-nonregulated revenues drove the decline in 2016, offset by electric revenues. These factors drove its revenue growth in 9M17.

SCG’s Gas Distribution and Gas Marketing segments drove its revenues in 2016, which was offset by its Electric Operations segment. Every segment drove the company’s revenue growth in 9M17.

Dividend ETFs with exposure to SCG

The First Trust Morningstar Dividend Leaders ETF (FDL) has a PE (price-to-earnings) ratio of 19.9x and a dividend yield of 3.3%. The SPDR S&P Global Dividend ETF (WDIV) has a PE ratio of 14.3x and a dividend yield of 3.7%.

We’ll discuss the SCG’s EPS (earnings per share) performance and its future operating revenue and EPS drivers in the final part of this series.

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