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Northeast Utilities Hikes Dividend

by Zacks Equity Research

February 06, 2013 | Comments : 0 Recommended this article: (0)

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The Board of Directors of Northeast Utilities (NU - Analyst Report) has approved an increase in its quarterly dividend by 7.1% to 36.75 cents per share from its earlier payment of 34.3 cents. As a result of this revision, the company’s annualized dividend will be $1.47 per share. The new annual dividend yield will be 3.6%, which is higher than the industry average of 2.3%. This dividend is payable on Mar 28, 2013 to shareholders of record as of Mar 1, 2013.

Northeast Utilities’ dividend-payment history affirms its commitment to maximize shareholder wealth. Previously, the company had increased its dividend in Feb 2012. Quarterly dividend payout climbed 16.8% to 34.3 cents per share from 29.37 cents per share. The company values its owners and has been trying to boost their income by hiking the dividend payment and consistent payment of dividend each year since 1966.

Northeast Utilities’ cash flow from operating activities was $796 million in the first nine months of 2012 and cash balance was $73.4 million as of Sep 30, 2012. A strong liquidity position will help the company to meet its anticipated cash requirements and fund future growth opportunities.

Other energy providers that have recently increased their dividend are Dominion Resources Inc. (D - Snapshot Report) that increased its dividend by 6.6%, CMS Energy Corporation (CMS - Analyst Report) which raised its dividend by 6.25% and ALLETE, Inc. (ALE - Snapshot Report) which announced a hike of 3.3%.

Northeast Utilities will report fourth-quarter and full-year 2012 results on Feb 18, 2013. As per the Zacks Consensus Estimates, the company’s earnings for fourth-quarter and full-year 2012 are currently pegged at 59 cents per share and $2.29 per share, respectively.

Hartford, Connecticut and Boston, Massachusetts-based Northeast Utilities provides energy delivery services to residential, commercial and industrial customers in Connecticut, New Hampshire and Massachusetts. The company currently has a short-term Zacks Rank #4 (Sell).

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