PPL’s (PPL) dividend increase in February was its 16th annual increase in 17 years. Its payout ratio was 75% last year—higher than its five-year average of 65%. Payout ratios represent how much of a company’s profit is distributed to shareholders as dividends. US utilities’ (XLU) average payout ratio is generally ~65%–70%.
Duke Energy’s (DUK) payout ratio was ~96% in 2017, while NextEra Energy (NEE), the largest utility by market capitalization, had a payout ratio of ~59%. NextEra’s higher capital investments could be one of the main reasons behind its lower payout ratio.
PPL is among the S&P 500’s top-yielding utility stocks. For a comparison of utilities’ yields, read Market Realist’s Here Are the S&P 500 Utility Stocks with the Best Dividends.