PPL Corporation (PPL) is currently trading at a dividend yield of 5.8%, which is much higher than utilities’ average yield of 3.4%. It’s trading at a yield more than double that of NextEra Energy (NEE), the biggest utility by market capitalization. Duke Energy (DUK) and Southern Company (SO) stocks currently offer dividend yields of 4.6% and 5%, respectively.
Even though PPL is trading at a superior dividend yield compared to its peers, its per-share dividend growth in the last few years was much lower than the industry average. Its per-share dividends rose 1.8% compounded annually in the last five years. In the same period, utilities at large (XLU) managed to increase dividends 4% compounded annually. Southern Company and Duke Energy managed to raise their per-share dividends 3.4% and 2.9%, respectively, compounded annually in the last five years.
PPL’s EPS growth will likely remain at 5%–6% through 2020, which is well within the industry average. Its targeted dividend growth will most likely be at a similar level.
PPL’s dividend increase in Q1 2018 was the 16th annual increase in its dividend per share in the last 17 years. Its payout ratio was 75% in the last 12 months, which was higher than its five-year average payout ratio of 65%.
To know more about dividend profiles of two regulated utility giants, read Dividend Showdown: Southern Company versus Duke Energy