Expected dividend growth
Southern Company (SO) and Duke Energy’s (DUK) earnings are expected to increase ~4%–6% annually for the next few years—in line with the industry average. As a result, their annual dividend per share growth is expected to be close to this level.
At the same time, Dominion Energy (D) and NextEra Energy (NEE) are aiming for an annual dividend per share increase of 10% and 13%, respectively. Broader utilities’ (XLU) average expected dividend growth per year might seem insignificant given these utilities’ targeted dividend growth.
In the past five years, Dominion Energy managed to grow its dividend per share 7.5% compounded annually, while NextEra Energy increased its dividends 10.5% compounded annually during the same period. The higher earnings growth mainly drives these utilities’ superior dividend growth.
To learn more, read Dominion Energy and NextEra Energy: A Dividend Comparison.