FirstEnergy’s (FE) forward dividend yield is 4.2%—higher than many top utilities’ and just below its five year average of ~4.8%. Meanwhile, the Utilities Select Sector SPDR ETF’s (XLU) forward yield is 3.4%, Xcel Energy’s (XEL) is 3.3%, and Consolidated Edison’s (ED) is 3.9%.
FirstEnergy’s dividend growth has been disappointing, mainly due to its relatively unstable earnings. In the last five years, FirstEnergy’s dividend per share has decreased by ~8%, while utilities overall have increased their dividends by 4% compounded annually. Since FirstEnergy is becoming a pure-play regulated utility, its earnings will likely stabilize in the next few years, which could also bode well for its dividends.
In the first quarter of 2014, FirstEnergy cut its dividend from $0.55 to $0.36 when cash retention became vital. After four years of no dividend growth, FirstEnergy increased its dividend by 5.5%. It will be paid in Q1 2019.
Xcel Energy has increased its dividend by 6.4% compounded annually, while Consolidated Edison (ED) has raised its dividend by 3%. Consolidated Edison has one of the longest dividend payment histories among utilities, having increased its dividend for the last 44 years. To learn more, read All You Need to Know about Consolidated Edison’s Dividend Profile.