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American Electric Power’s Dividend Yield Compared to Peers

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AEP’s long dividend payment history

Ohio-based American Electric Power Company (AEP) has declared a cash dividend of $0.62 per share for the third quarter. The dividend will be paid to shareholders of record as of August 10, payable on September 10. The company has one of the longest dividend payment histories among utility giants and has paid a cash dividend for the last 432 consecutive quarters.

AEP is expected to pay an annualized dividend of $2.48 per share this year, which is approximately 4% higher than its dividend last year. It’s currently trading at a dividend yield of 3.6%, which is marginally higher than utilities’ (XLU) average yield of 3.4%. AEP’s five-year historical average dividend yield is around the same level.

AEp ylds

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Dividend growth

In the last five years, AEP increased its per share dividend by 5% compounded annually. Its dividend growth rate is more or less in line with its peers.

Regulated utility Southern Company (SO) is currently trading at a dividend yield of 5.1%, while NextEra Energy (NEE), the biggest utility by market capitalization, has a yield of 2.6%. Dominion Energy (D) is trading at a dividend yield of 4.7%.

Compounded annually, Southern Company has increased its dividend 3.4% over the last five years. NextEra Energy has increased its dividend 10.4%, and Dominion Energy has raised its dividend 7.5%. Superior earnings growth for Dominion Energy and NextEra Energy in the last few years mainly influenced their above-average dividend growth.

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