The board of directors of NV Energy Inc. ( NVE - Snapshot Report ) has approved to increase the quarterly dividend of the company by 11.8% to 19 cents. The revised dividend is payable on Mar 20, 2013, to shareholders of record at the close of business on Mar 5, 2013.

The new annualized dividend rate of the company comes to 76 cents. This results in a dividend yield of 4.0%, higher than the industry average of 2.3%. The company has been increasing its payout every year since 2008. The previous increase in the quarterly dividend rate was on May 8, 2012, when the rate was increased by 30.8% to 17 cents from 13 cents.

Consistent dividend payment and a steady hike in the payout rate bear testimony to the company’s financial performance and commitment to increase shareholder wealth. The long-term policy of NV Energy is to target a dividend payout ratio in the range of 55% to 65%. To achieve this target the company will aim to increase its dividend rate by an average 10% in the next few years. The current hike is also in tandem with its dividend policy.

The company is a strong cash flow generator and boasts of a healthy cash balance, which enables it to make regular dividend payments. Free cash flow (FCF) of the company in the first nine months of 2012 was $256.4 million. Going forward, FCF is expected to increase with a decline in capital expenditure and enforcement of new rates. Cash and cash equivalents as of Sep 30, 2012 were $207.9 million versus $145.9 million as Dec 31, 2011.

Apart from NVE Energy Inc., other energy providers have recently increased their quarterly dividends. Dominion Resources Inc. ( D - Snapshot Report ) increased its dividend by 6.6%, CMS Energy Corporation ( CMS - Analyst Report ) raised its dividend by 6.25% and Northeast Utilities ( NU - Analyst Report ) announced a hike of 7.1% from the respective preceding quarter payments.

Based in Las Vegas, Nevada, NV Energy was founded in 1906. The company mainly delivers electricity to customers in Nevada. The bulk of the company’s electricity is generated from natural gas. With a market cap of $4.47 billion the company has 2,811 full time employees.