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MGE Energy (MGEE) Gifts Investors with 4.2% Dividend Hike
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MGE Energy Inc.’s (MGEE - Free Report) board of directors has approved a 4.2% hike in its quarterly dividend rate. The revised dividend of 30.75 cents per share will be distributed on Sep 15, 2016 to shareholders of record as of the close of business on Sep 1.
The recently approved hike marks an increase of 1.25 cents from the last dividend rate of 29.50 cents per share and is in sync with the company’s customer-focused business model. The new annualized dividend amounts to $1.23 per share, up from $1.18 per share paid earlier, resulting in a dividend yield of 2.17%.
MGE Energy’s management has consistently increased its dividend payout over the last 41 years.
The company has been witnessing a consistent increase in free cash flows, enabling it to boost dividends on a regular basis. Free cash flow at the end of the first six months of 2016 stood at $52.7 million, compared to $39.8 million in the year-ago period. A strong credit rating further allows the company access to cheap debt capital for investing in capital-growth projects, without diluting its existing shareholder base. Investment projects provide regular cash flows, which in turn are used to pay dividend to shareholders.
On account of stringent mandates by various state governments to transition to renewable sources for generating electricity, MGE Energy’s main affiliate, Madison Gas and Electric, is making impressive strides with regard to its framework “Energy 2030”.
Energy 2030 aims to meet25% of the total retail electric demand with renewable sources by 2025, which will increase to 30% by 2030. The plan also includes engaging customers to reduce carbon dioxide emissions by 40% by 2030 from 2005 levels, as well as to reduce peak energy usage to minimize long-term costs for the community as a whole.
Energy 2030 also covers the enhancement of the durability and reliability of the electrical grid to provide uninterrupted service to customers.
Dividend Hike by a Peer
Last week, the board of directors of ITC Holdings Corp. approved an almost 15% hike in its quarterly dividend rate. The revised dividend of 21.55 cents per share will be distributed on Sep 15, 2016 to shareholders of record as of the close of business on Sep 1.
The recently approved hike marks an increase of 2.8 cents from the last dividend rate of 18.75 cents per share and is in line with management’s long-term dividend policy. The new annualized dividend amounts to 86.2 cents per share, up from 75 cents paid earlier, resulting in a dividend yield of 1.8%. (Read more: ITC Holdings Declares 15% Hike in Quarterly Dividend)
Zacks Rank & Key Picks
MGE Energy carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the utility space include Power Corp. (KEP - Free Report) and Spark Energy, Inc. , both sporting a Zacks Rank #1 (Strong Buy).
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MGE Energy (MGEE) Gifts Investors with 4.2% Dividend Hike
MGE Energy Inc.’s (MGEE - Free Report) board of directors has approved a 4.2% hike in its quarterly dividend rate. The revised dividend of 30.75 cents per share will be distributed on Sep 15, 2016 to shareholders of record as of the close of business on Sep 1.
The recently approved hike marks an increase of 1.25 cents from the last dividend rate of 29.50 cents per share and is in sync with the company’s customer-focused business model. The new annualized dividend amounts to $1.23 per share, up from $1.18 per share paid earlier, resulting in a dividend yield of 2.17%.
MGE Energy’s management has consistently increased its dividend payout over the last 41 years.
The company has been witnessing a consistent increase in free cash flows, enabling it to boost dividends on a regular basis. Free cash flow at the end of the first six months of 2016 stood at $52.7 million, compared to $39.8 million in the year-ago period. A strong credit rating further allows the company access to cheap debt capital for investing in capital-growth projects, without diluting its existing shareholder base. Investment projects provide regular cash flows, which in turn are used to pay dividend to shareholders.
MGE ENERGY INC Price
MGE ENERGY INC Price | MGE ENERGY INC Quote
Energy 2030
On account of stringent mandates by various state governments to transition to renewable sources for generating electricity, MGE Energy’s main affiliate, Madison Gas and Electric, is making impressive strides with regard to its framework “Energy 2030”.
Energy 2030 aims to meet25% of the total retail electric demand with renewable sources by 2025, which will increase to 30% by 2030. The plan also includes engaging customers to reduce carbon dioxide emissions by 40% by 2030 from 2005 levels, as well as to reduce peak energy usage to minimize long-term costs for the community as a whole.
Energy 2030 also covers the enhancement of the durability and reliability of the electrical grid to provide uninterrupted service to customers.
Dividend Hike by a Peer
Last week, the board of directors of ITC Holdings Corp. approved an almost 15% hike in its quarterly dividend rate. The revised dividend of 21.55 cents per share will be distributed on Sep 15, 2016 to shareholders of record as of the close of business on Sep 1.
The recently approved hike marks an increase of 2.8 cents from the last dividend rate of 18.75 cents per share and is in line with management’s long-term dividend policy. The new annualized dividend amounts to 86.2 cents per share, up from 75 cents paid earlier, resulting in a dividend yield of 1.8%. (Read more: ITC Holdings Declares 15% Hike in Quarterly Dividend)
Zacks Rank & Key Picks
MGE Energy carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the utility space include Power Corp. (KEP - Free Report) and Spark Energy, Inc. , both sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>