PNM Resources’ PNM board of directors has approved a 5.8% increase in the quarterly dividend rate to 36.75 cents per share. This is consistent with the target payout ratio of 55% of the net income. The new dividend is payable on Feb 17, 2023 to stockholders of record on Feb 3, 2023.
The increase in dividend results in an annualized dividend of $1.47 per share from $1.39, reflecting the third increase during the company’s pending merger. The current dividend yield is 3%, better than the Zacks S&P 500 composite's average of 1.53%.
The current dividend of 36.75 cents per share indicates a growth of 194% from 12.5 cents, paid during the first quarter of 2012. This indicates that the company has improved long term value of shareholders by its stable performance and increased dividend rate.
Utilities’ Legacy of Dividend Payment
Companies involved in utility services generally have stable operations and earnings. Consistent performance, regulated returns and the ability to generate cash flows allow utilities to reward shareholders with regular dividends. Utilities are often considered as bonds substitute due to their ability to distribute dividend on a regular basis.
PNM Resources has consistently increased dividends since 1996. Similarly, companies under the same industry, like CMS Energy CMS, Duke Energy DUK and WEC Energy Group WEC, have been increasing dividends since 1995.
The Zacks Consensus Estimate for CMS Energy’s fourth-quarter earnings is pegged at 60 cents per share, implying a year-over-year increase of 27.7%. CMS Energy’s current dividend yield is 2.9%.
The Zacks Consensus Estimate for Duke Energy’ fourth-quarter earnings is pegged at $1.07 per share, implying a year-over-year increase of 13.8%. Duke Energy’s current dividend yield is 4%.
The Zacks Consensus Estimate for WEC Energy Group’ fourth-quarter earnings is pegged at 75 cents per share, implying a year-over-year increase of 5.7%. WEC Energy’s current dividend yield is 3.4%.
Over the last three months, the PNM Resources stock has returned 5.8%, outperforming the industry average of 3.3%.
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The PNM Resources currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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