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Natural gas-focused energy company, Questar Corporation (STR - Analyst Report) has recently increased its quarterly cash dividend payment by 6% to 18 cents per share, up from 17 cents per share paid in the last quarter. The new dividend will be paid on Jun 10, 2013, to shareholders of record as of May 24, 2013.

Importantly, for the past 41 years Questar hiked its dividend as many as 41 times. Based on the closing price of $25.44 on May 10, 2013, the proposed dividend affirms a yield of 2.8%. A steady dividend payout facilitates the long-term strategy of the company to provide attractive risk-adjusted returns to its stockholders.

The dividend hike reflects continued strong performance by the company, backed by solid operating results, good investments and a diligent execution of its strategic plan.

Founded in 1922, Salt Lake City, Utah-based Questar operates with three principal subsidiaries – Wexpro Company, Questar Pipeline, and Questar Gas Company.

Questar, after the QEP Resources (QEP - Analyst Report) spin-off, has transformed itself into a natural gas-operated energy company. The company focuses exclusively on exploring natural gas resources while serving domestic and worldwide customers.

Moreover, Questar enjoys one of the best credit ratings in the utilities sector. This provides the company with a competitive advantage in accessing capital at a reasonable cost.

On the flip side, Questar’s inability to comply with various laws and regulations and obtain fair and timely rate relief and requisite regulatory approvals could hamstring future earnings and growth.

Questar currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

In the utility gas distribution sector, Chesapeake (CPK - Snapshot Report) and National Fuel Gas Company (NFG - Snapshot Report) are expected to significantly outperform the broader U.S. equity market over the next one to three months. Both the stocks currently retain a Zacks Rank #1 (Strong Buy).

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