San Diego-based diversified utility company Sempra Energy (SRE) declared a 6.1% year-over-year increase in the quarterly dividend rate, upon approval from its board of directors. The revised dividend of 70 cents per share will be paid on Apr 15, 2015 to shareholders of record as on Mar 27.
The increased rate raises Sempra Energy’s annual dividend to $2.80 per share, which reflects a yield of 2.5%. The company shares profits with its stakeholders through the payment of dividends at regular intervals and increases the figure once a year.
Previously, in Feb 2014, Sempra Energy had increased its quarterly dividend rate to 66 cents, up 4.8% sequentially. In the first nine months of 2014, the company paid $450 million as common dividends.
The company maintains a stable financial position, including cash and cash equivalents of $667 million as of Sep 30, 2014 and operating cash flow of $1,661 million in the first nine months of 2014.
In addition to distributing regular dividends, Sempra Energy pursues an effective share repurchase program to increase shareholder value. In the first nine months of 2014, the company utilized $38 million to repurchase shares of its common stock.
Sempra Energy also invests substantially in infrastructure development projects and expansion of its renewable portfolio. These initiatives will enable the company to serve a wider customer base and improve reliability.
A favorable financial profile along with disciplined capital investment will help Sempra Energy to maintain a stable cash inflow, which will support its dividend payout program going forward.
Sempra Energy currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include WGL Holdings Inc. (WGL), Chesapeake Utilities Corp. (CPK) and ONE Gas, Inc. (OGS). WGL Holdings sports a Zacks Rank #1 (Strong Buy) while Chesapeake Utilities and ONE Gas have a Zacks Rank #2 (Buy).
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