Last week Xcel Energy (XEL) announced their 2017 dividend increase of $0.02 per share. This brings the quarterly dividend to $0.36 from last years $0.34 per share. Good for a 5.88% increase. XEL is a boring energy company operating throughout the Midwest and West in a total of 8 states. This increase marks 14 years straight of dividend increases. The current dividend yield is 3.32% based on Fridays close of 43.34. Something I like about XEL is their investor relations site. It’s clear on their objectives. Pulled straight from the XEL Investor relations site:
• Long-term EPS growth of 4-6%
• Annual dividend increases of 5-7%
• Dividend payout ratio target of 60-70%
• Maintain senior unsecured debt credit ratings in the BBB+ to A range
• Maintain senior secured debt credit ratings in the A range
XEL Dividend History:
As you can see, from 2003-2017, XEL has grown its dividend an average of 4.47%. Recent years have been a little more generous with increases. That growth rates has resulted in dividend income almost doubling during the 15 year time frame or an overall increase of 89%.
XEL vs S&P500
Being an energy company, you really aren’t expecting groundbreaking growth. However, looing at the last decade, we see that XEL has still managed to slightly outperform the S&P500. Add to that a better yield, and you have a nice boring holding that gives modest growth and decent growing income.
XEL Key Stats:
Market Cap: $22 Billion
Dividend Yield: 3.32%
Payout Ratio: 61.75%
Profit Margin: 10.11%
Total Cash: $359 Million
Total Debt: $14.48 Billion
Beta is freakishly low. Debt concerns me. Profit Margin remains within managements goal of 60-70%, and at the current level allows room for future dividend increases.
XEL is a perfect retiree stock holding. Decent stock appreciation and a decent yield that has room to grow. I would however hold off on purchasing at the current price and look for an entry price at $41.Follow me on the social medias: