Avista Corporation AVA announced that its board of directors has approved a 4.4% hike in its quarterly common stock dividend, bringing the annualized payout to $1.43 per share.
The Latest Hike
The new dividend of 35.75 cents, which is higher than the prior payment of 34.25 cents, will be effective from the first quarter of 2017. The amount will be paid on Mar 15, 2017 to shareholders of record as on Feb 24.
This marks the 15th consecutive annual dividend hike for shareholders of Avista, the last one being in Feb 2016.
The latest increase in the dividend rate speaks volumes about the company’s financial strength. As of Sep 30, 2016, Avista had a committed line of credit of about $400 million, with $187 million in cash borrowing and $73.2 million in letters of credit outstanding. This leaves $139.8 million of available liquidity under this line of credit.
Moreover, its sustained investment strategy continues to reap benefits for the company. In the first nine months of 2016, Avista Utilities spent $274 million as capital investment. The company had earlier said that it expected to spend about $375 million in 2016 and $400 million in 2017.
After taking into consideration Avista’s results of operations, cash flows, and financial and competitive conditions, it is evident that the company has continuously paid dividends on its common stock. Net income from the regulated utility operations is the main source for dividends for Avista.
Avista is a diversified energy company with utility and subsidiary operations located across North America. Avista also operates Avista Capital, which owns all of the company's non-regulated energy and non-energy businesses. The energy company is involved in the production, transmission and distribution of energy as well as other energy-related businesses.
Over the last one year, Avista has outperformed the Zacks categorized Utility- Electric Power industry. During this period, the company’s shares gained 2.9%, compared with the industry’s gain of 1.6%. This could be because the company’s strong financials enable it to execute investor-friendly measures at regular intervals.
Zacks Rank & Key Picks
Avista currently holds a Zacks Rank #4 (Sell). Some better-ranked stocks in the power sector include Xcel Energy Inc. XEL, CenterPoint Energy CNP and NextEra Energy, Inc. NEE, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Xcel Energy has reported a positive surprise in three of the last four quarters, resulting in an average positive surprise of 0.8%. Shares of the company gained 6.1% in the last 12 months, outperforming the broader industry.
CenterPoint has reported a positive surprise in three of the last four quarters, resulting in an average positive surprise of 5.1%. Shares of the company increased 41.9% in the last 12 months, outperforming the broader industry.
NextEra Energy has reported a positive surprise in three of the last four quarters, resulting in an average positive surprise of 4.32%. Shares of the company moved 8.9% higher in the last 12 months, outperforming the broader industry.
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