SCANA Corporation (SCG - Free Report) announced approval from the board of directors to slash its second-quarter 2018 dividend.
From 61.25 cents per share paid in first-quarter 2018, the South Carolina utility will cut its dividend payments by roughly 80% to 12.37 cents. The new dividend will likely be paid on Jul 18 to stockholders of record as of Jul 10. Notably, this is the first time since 1999 that SCANA’s board of directors chose to cut dividend payments.
Investors should not be surprised with SCANA’s decision as the company has been for long looking for options to resolve cost concerns associated with the futile nuclear program. In Fairfield County, South Carolina, SCANA was constructing two nuclear plants with combined capacity of 2,234 MW. However, the company decided to abandon the project since concerns related to cost overrun and delays impeded the nuclear developments.
SCANA opted to cut the dividend payout immediately after The South Carolina General Assembly passed a measure for lowering the sum of money the company will be able to get from its clients for recovering costs associated with the failed developments. Although Governor Henry McMaster decided not to sign the bill, legislators of South Carolina could choose to overrule the governor’s decision.
The bill has great significance since if it gets converted into law, SCANA will likely get deprived from the opportunity to merge with Dominion Energy, Inc. (D - Free Report) .
Based in Cayce, Fairfield County, South Carolina, SCANA currently carries a Zacks Rank #3 (Hold). Meanwhile, better-ranked players in the energy sector include Eclipse Resources Corporation (ECR - Free Report) and Chevron Corporation (CVX - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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