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Wisconsin Energy to Hike Quarterly Dividend Rate by 8.3%

Wisconsin Energy Corporation (WEC) maximizes shareholder wealth through the distribution of incremental dividends. The company’s board of directors plans to raise quarterly dividend rate in the first quarter of 2015. Per the plan, quarterly dividend will be increased 8.3% sequentially to 42.25 cents.

The board intends to make the financial announcement in a meeting scheduled in Jan 2015.

On an annualized basis, Wisconsin Energy’s dividend rate will come at $1.69 per share. The revised dividend is expected to be paid on Mar 1 to shareholders of record as on Feb 13.

Wisconsin Energy has a stable dividend payment history and has increased the quarterly dividend rate every year since 2011. The last quarterly dividend hike was in Mar 2014 when it had been increased around 2% to 39 cents per share from the previous payout.

At an investor meet in Nov 2014, Wisconsin Energy expressed its aim to maintain a dividend payout ratio of 65%–70% of earnings in 2017. The company plans to raise the average annual dividend in the range of 7%–8% between 2015 and 2017.

During the latest announcement, Wisconsin Energy reiterated its 2014 adjusted earnings projection to the range of $2.60–$2.64 per share, up from $2.51 per share a year-ago.

Wisconsin Energy maintains a stable liquidity position backed by efficient cash generating capacity. In the first nine months of 2014, the company’s operating cash flow came in at around $1.03 billion. In addition, the company had available funds worth roughly 1.2 billion as of Sep 30, 2014 under the bank back-up credit facilities.

Apart from paying dividends, Wisconsin Energy also makes efficient utilization of funds for expanding existing operations. The company is currently in the process to acquire Integrys Energy Group, Inc. (TEG).

In addition, Wisconsin Energy plans to invest a $6.5–$7.1 billion between 2014 and 2023 in infrastructure projects. The company is currently expanding its gas distribution assets, converting the fuel source to gas from coal at the Valley Power Plant and constructing a powerhouse at the Twin Falls facility.

Scheduled completion of these projects will enable Wisconsin Energy to meet its fund requirement for both dividend payment and infrastructure development.

Wisconsin Energy currently has a Zacks Rank #2 (Buy). Other stocks worth considering in the same industry include Black Hills Corporation (BKH) and PG&E Corporation (PCG), both carrying a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on WEC
Read the Full Research Report on TEG
Read the Full Research Report on PCG
Read the Full Research Report on BKH


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