PG&E Corporation (PCG) Increases Annual Dividend By 7.7%

PG&E Corporation (NYSE:PCG) announced that its board of directors has approved an increase in the quarterly dividend rate by 3.5 cents, bringing the annualized payout to $1.96 per share, up 7.7% from $1.82 paid earlier.

The raised quarterly dividend will amount to 49 cents per share from the prior payment of 45.5 cents. This amount will be paid on Jul 15, 2016 to shareholders of record at the close of business on Jun 30.

This marks the first annual dividend hike by PG&E Corp. in the past six years. It reflects the company’s successful attempt to take the dividend amount to a competitive level.

The current annualized dividend yield is 3.3%. PG&E Corp. aims to attain a payout ratio of 55–65% and about 60% by 2019.

PG&E Corp. boasts a stable liquidity position, along with strong cash generating capacity, through operating activities. As of Mar 31, 2016, the company had cash and cash equivalents of $142 million, up from $123 million at 2015 end. The company’s operating cash flow at the end of the first quarter was around $1.1 billion.

Apart from its investments in growth projects, a stable financial position allows PG&E Corp. to pay regular dividends. In the first quarter, the company distributed $219 million as common stock dividends, up 3.8% from the year-ago level. Consistent performance and robust cash flow generation capability enables the company to continue paying dividends to its shareholders.

Currently, PG&E Corp. has a Zacks Rank #3 (Hold).

Stocks to Consider

A few better-ranked stocks in the utility space include Spark Energy, Inc. (NASDAQ:SPKE) , Avista Corp. (NYSE:AVA) and CenterPoint Energy, Inc. (NYSE:CNP) . While Spark Energy sports a Zacks Rank #1 (Strong Buy), both Avista Corp. and CenterPoint Energy carry a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

CENTERPOINT EGY (CNP): Free Stock Analysis Report

PG&E CORP (PCG): Free Stock Analysis Report

AVISTA CORP (AVA): Free Stock Analysis Report

SPARK ENERGY (SPKE): Free Stock Analysis Report

Original post

Zacks Investment Research