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WEC Energy to Raise Dividends; Offers 2017 Earnings Outlook
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WEC Energy Group, Inc.’s (WEC - Free Report) board of directors revealed its plans of paying quarterly dividend of 52 cents per share, up from the current payout of 49.50 cents, for the first quarter of 2017. This reflects an increase of 2.5 cents per share or 5.1% in the quarterly dividend.
The new annualized rate would be $2.08, up from the current payout of $1.98. WEC Energy’s board expects to declare the revised rate in January, which will be payable on Mar 1, 2017, to shareholders of record as of Feb 14, 2017.
The utility has regularly hiked dividends from the 2010 level of 80 cents to the current payout of $1.98, reflecting a growth rate of 16.3%, compounded annually and thereby returned substantial value to shareholders. WEC Energy projects annual dividends to grow in tandem with earnings and anticipates a payout ratio of 65–70%.
A sound operating profile allows WEC Energy to keep up with its dividend policy. In the first nine months of 2016, cash flow from operating activities was $1,722 million, up 60.3% from $1,074.4 million in the year-ago period.
The company expects 2017 earnings to be in the range of $3.06–$3.12 per share, in line with the company’s target of an annual earnings growth rate of 5% to 7% beyond 2016, from the 2015 level of $2.72.
Price Movement
WEC Energy has largely outperformed the Zacks Categorized Utility-Electric Power industry over the last 12 months. Shares of the company improved 11% compared to the industry’s 2.9% gain.
The primary reasons for this outperformance include above-average earnings per share and dividend growth prospects, a strong financial position, a constructive regulatory environment and a proven management team.
Further, with the integration of the Integrys Energy acquisition, WEC Energy has become one of the 15 largest investor-owned utilities and the eighth-largest natural gas distribution company in the U.S. Post acquisition, WEC Energy has a 60% ownership interest in American Transmission Company (ATC), one of the largest transmission companies of the U.S.
Zacks Rank & Other Key Picks
WEC Energy carries a Zacks Rank #2 (Buy). Other favorably placed stocks in the same space include Avista Corp. (AVA - Free Report) , Ameren Corporation (AEE - Free Report) and DTE Energy Company (DTE - Free Report) .
Ameren Corp., another Zacks Rank #2 stock, has seen four upward estimate revisions for 2016 over the last 60 days. Its estimates increased from $2.53 per share 60 days ago to $2.70 today, reflecting an upside of 6.7%.
DTE Energy has seen three upward estimate revisions for 2016 over the last 60 days. DTE Energy carries a Zacks Rank #2 as well. Its estimates increased from $5.16 per share 60 days ago to $5.26 today, reflecting an upside of 1.9%.
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WEC Energy to Raise Dividends; Offers 2017 Earnings Outlook
WEC Energy Group, Inc.’s (WEC - Free Report) board of directors revealed its plans of paying quarterly dividend of 52 cents per share, up from the current payout of 49.50 cents, for the first quarter of 2017. This reflects an increase of 2.5 cents per share or 5.1% in the quarterly dividend.
The new annualized rate would be $2.08, up from the current payout of $1.98. WEC Energy’s board expects to declare the revised rate in January, which will be payable on Mar 1, 2017, to shareholders of record as of Feb 14, 2017.
The utility has regularly hiked dividends from the 2010 level of 80 cents to the current payout of $1.98, reflecting a growth rate of 16.3%, compounded annually and thereby returned substantial value to shareholders. WEC Energy projects annual dividends to grow in tandem with earnings and anticipates a payout ratio of 65–70%.
A sound operating profile allows WEC Energy to keep up with its dividend policy. In the first nine months of 2016, cash flow from operating activities was $1,722 million, up 60.3% from $1,074.4 million in the year-ago period.
WEC ENERGY GRP Price
WEC ENERGY GRP Price | WEC ENERGY GRP Quote
Looking Ahead
The company expects 2017 earnings to be in the range of $3.06–$3.12 per share, in line with the company’s target of an annual earnings growth rate of 5% to 7% beyond 2016, from the 2015 level of $2.72.
Price Movement
WEC Energy has largely outperformed the Zacks Categorized Utility-Electric Power industry over the last 12 months. Shares of the company improved 11% compared to the industry’s 2.9% gain.
The primary reasons for this outperformance include above-average earnings per share and dividend growth prospects, a strong financial position, a constructive regulatory environment and a proven management team.
Further, with the integration of the Integrys Energy acquisition, WEC Energy has become one of the 15 largest investor-owned utilities and the eighth-largest natural gas distribution company in the U.S. Post acquisition, WEC Energy has a 60% ownership interest in American Transmission Company (ATC), one of the largest transmission companies of the U.S.
Zacks Rank & Other Key Picks
WEC Energy carries a Zacks Rank #2 (Buy). Other favorably placed stocks in the same space include Avista Corp. (AVA - Free Report) , Ameren Corporation (AEE - Free Report) and DTE Energy Company (DTE - Free Report) .
Avista has seen one upward estimate revision for 2016 over the last 60 days. Its estimates increased from $2.08 per share 60 days ago to $2.09 today. The stock carries a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ameren Corp., another Zacks Rank #2 stock, has seen four upward estimate revisions for 2016 over the last 60 days. Its estimates increased from $2.53 per share 60 days ago to $2.70 today, reflecting an upside of 6.7%.
DTE Energy has seen three upward estimate revisions for 2016 over the last 60 days. DTE Energy carries a Zacks Rank #2 as well. Its estimates increased from $5.16 per share 60 days ago to $5.26 today, reflecting an upside of 1.9%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>