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Wisconsin Energy Ups Dividend Rate

Zacks Equity Research

Wisconsin Energy Corporation (WEC) continues to share more benefits with its shareholders by increasing the dividend rate. The board of directors of the company approved an increase in quarterly dividend by 12.5% sequentially and 27.5% year over year to 38.25 cents per share. The new dividend will be effective from the second half of 2013 and will likely be payable on Sep 1, 2013, to shareholders of record as of Aug 14.

It is evident from Wisconsin Energy’s dividend distribution history that the company is always on the lookout for maximizing shareholder wealth. In fact, it is targeting to reach a dividend payout ratio of 65-70% of earnings in 2017. The company has been paying dividends to its shareholders for the last 284 consecutive quarters since 1942 and hiking the dividend every year since 2004.

The last dividend increase was made in Dec 2012. The board of directors increased its quarterly dividend by 13.3% to 34 cents per share from the prior-year payment of 30 cents per share.

Wisconsin Energy’s cash flow from operating activities during the first three months of 2013 was $330.3 million. A stable financial position allows the company to meet the cash requirements for its dividend payment and for future growth projects.

Wisconsin Energy plans to invest $3.2–$3.5 billion within 2013 to 2017 for several projects including the construction of a biomass fuel generating plant in Rothschild, a fuel source conversion project at Valley Power Plant, a new powerhouse at the Twin Falls hydroelectric site and improvement of fuel flexibility at the Oak Creek expansion units. These initiatives would add to Wisconsin Energy’s profitability in the long run, which will in turn enable it to provide higher returns to its shareholders.

Wisconsin Energy currently has a Zacks Rank #2 (Buy). Other stocks from the industry that are presently performing well include Companhia Paranaense de Energia (ELP) and Integrys Energy Group, Inc. (TEG), both with a Zacks Rank #1 (Strong Buy), and Calpine Corp. (CPN) with a Zacks Rank #2 (Buy).

Milwaukee, Wis.-based Wisconsin Energy engages in generation and distribution of electricity in southeastern, east central, and northern Wisconsin, and Upper Peninsula of Michigan.

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