3 Things to Love About SSE

LONDON -- There are things to love and loathe about most companies. Today, I'm going to tell you about three things to love about SSE  (LSE: SSE  ) , formerly known as Scottish & Southern Energy

I'll also be asking whether these positive factors make this FTSE 100 utilities group a good investment today.

Dividends No. 1
SSE has delivered annual dividend growth for 13 successive years. Last year's payout of 80.1 pence was more than three times the first full-year dividend the company paid in 1999.

SSE's record is such that the company is now one of just five FTSE 100 members to have delivered better-than-inflation dividend growth every year during the period. The compound annual growth rate comes in at more than 9%.

Dividends No. 2
Not only is SSE's past dividend growth impressive, but future dividend growth also looks bright. According to SSE's chairman:

There can be every confidence that SSE will extend further its record of annual above-inflation dividend growth, and it is targeting a full-year increase of at least 2% more than RPI inflation, to around 84p, for 2012/13 and annual increases that are above RPI inflation in the following years.

Dividends No. 3
SSE's shares, currently trading at around 1,550 pence, have had a good run of late: up 12% over the past three months compared with a 2% rise for the FTSE.

Nevertheless, the stock continues to offer a perky yield of over 5% based on company guidance for the year to March 2013, rising to 5.8% for the year ahead based on analyst consensus forecasts. The yield is well above the market average, the utilities-sector average and the interest rate on cash.

A good investment?
Dividends, dividends, dividends! There are few Footsie companies that can match SSE's track record. Furthermore, the board of directors and City analysts are agreed that the future for the dividend looks good, too.

If you're an income investor seeking a high starting yield and the prospect of above-inflation dividend growth, I think SSE continues to be a stock worth considering.

Finally, if you already have SSE tucked away in your portfolio and are looking for blue-chip shares in other sectors, I recommend you help yourself to the very latest free Motley Fool report.

You see, the Fool's top analysts have identified a select group of Footsie companies they believe will generate superior long-term income and capital growth. Such is their conviction about the quality of these businesses that they've called the report "5 Shares to Retire On."

You can download this free report right now -- simply click here.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2388795, ~/Articles/ArticleHandler.aspx, 8/30/2014 2:13:38 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement