Back to top

Image: Bigstock

OGE Energy (OGE) Rewards Shareholders With 1.9% Dividend Hike

Read MoreHide Full Article
OGE Energy Corp.(OGE - Free Report) recently announced that itsboardofdirectors has approved a hike in its quarterly dividend to 41 cents per share, reflecting an increase of 1.9% from the prior payout.
With the current hike, the company will now pay an annual dividend of $1.64 per share, effective from thefourth-quarter 2021 dividend. This represents an attractive annual dividend yield of 4.89% based on its share price worth as of Sep 29, well above the industry’s andthe Zacks S&P 500 composite’s yield of 3.31% and 1.28%, respectively.

Can OGE Sustain Dividend Hikes?

OGE Energy’s cash flow from operating activities worth $712.8 million at 2020-end improved 4.6% from the prior year levelamid the challenges triggered by the COVID-19 pandemic. This highlights the stock’s financial strength, which boosts its systematic investment trend, thereby enabling it to maintain its yearly dividend hikes.
Looking ahead, the company has $4.1 billion five-year capital investment plan in growth projects, which should be accretive to the company’s earnings and distributable cash flows.
Also, OG&E aims to grow its earnings 5% annually aided by lower-risk capital investment in growing service territory. Additionally, the company is anticipating more than 2% load growth in 2021 and remains on track to record a sustainable annual load growth at 1% in 2022 and beyond. Such investment trends and load growth estimates will aid the company in maintaining its yearly dividend hike, going forward.

Other Utilities Increasing Dividends

Supported by consistency in cash flows, other utilities have also been rewarding shareholders with solid dividend hikes.
For instance, recently, Public Service Enterprise Group Incorporated (PEG - Free Report) announced that its board of directors has approved a hike in its common stock dividend for 2022 by 12 cents per share to 54 cents per share.
Likewise in February 2021, NextEra Energy (NEE - Free Report) announced a 10% hike in its quarterly dividend, reflecting the revised dividend worth38 cents per share.
In the same month, Ameren Corporation (AEE - Free Report) announced that its boardofdirectorshas approved quarterly cash dividend 55 cents per share, reflecting an increase of 6.8% from prior cash dividend of 51.5 cents per share.

Price Movement

In the past one year, shares of OGE Energy have gained 11.8% as compared with the industry’s growthof 4.5%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank

OGE Energy carries a Rank of #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.