From dividend increases to Earth Day celebrations, utilities have been busy this week. Here's what you need to know to keep your portfolio's profits pouring in:
Electrifying Earth Day
Several utilities took the opportunity of Earth Day (Monday) to espouse environmental efforts. Southern (NYSE: SO ) loaded on 139 MW of solar and 250 MW of wind to its energy portfolio. The utility currently produces around 1,350 MW of generation from solar, hydropower, biomass, and landfill methane gas, equivalent to around 2.9% of its total capacity.
Duke Energy (NYSE: DUK ) released its sustainability report, updating shareholders on its $9 billion modernization project. The utility expects to retire 6,300 MW of coal capacity over the next few years and expects to own or purchase 6,000 MW of wind, solar, or biomass power by 2020.
PPL (NYSE: PPL ) celebrated Earth Day with the opening of a unique "clean coal" facility that recovers around 300,000 tons of gypsum mineral annually to be used in fertilizers. "Innovative projects like this show how coal has and will continue to be a major contributor to the economic vitality of Kentucky and of the U.S., not just in the energy sector, but in science and innovation and now agriculture," said Senate Minority Leader Mitch McConnell (R-Ky.) at the plant's grand opening. In the next five years, PPL expects to invest around $6 billion in its system.
It's earnings season
In the blink of an eye, Q1 2013 is here and gone. Southern reported earnings this week, hitting sales expectations but missing slightly on earnings. Any longer-term progress was negated by a $333 million after-tax charge for increased construction costs at a new power plant. The company increased its dividend last week for the 12th year in a row, calling into question the sustainability of its current cash flow.
After upping its dividend earlier in the week, American Electric Power (NYSE: AEP ) reported earnings on Friday, beating sales estimates and matching earnings expectations. Lackluster industrial demand and impending deregulation in Ohio are trouble spots for the utility, but overall rate increases and new transmission agreements mean that sustainable income isn't gone yet.
Dominion (NYSE: D ) disappointed this quarter, missing on sales and reporting EPS 8.8% below analyst expectations. Regulated sales slumped, but $25 million in EBIT from the utility's Blue Racer midstream joint venture kept earnings from evaporating. Looking ahead, the utility hopes to save $100 million on operating expenses for fiscal 2013 as it continues to grow its transmission business.
Stay current on electricity
The world of utilities is changing fast, and dividend stocks aren't the stable stalwarts they once were. Be sure to check back weekly for the latest on your portfolio's moves, and you'll be well on your way to electrifying earnings.
As the nation moves increasingly toward clean energy, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. This strength, combined with an increased focus on balance sheet health and its recent merger with Constellation, places Exelon and its resized dividend on a short list of the top utilities. To determine whether Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.