Utilities have been busy this week, making moves to maximize profit potential. With bigger dividends, Obama's new climate change policy, natural gas investments, and more, here's what you need to know to stay on top of your dividend stocks' latest moves.
Consolidated Edison (NYSE:ED) announced earlier this week that it plans to spend around $100 million extending its New York City natural gas infrastructure. The decision is based on a variety of factors but can be most directly linked to environmental regulation compliance and cheaper costs for both Con Ed and customers.
"Building owners who make this choice will lower their energy bills and contribute to making New York City cleaner, safer, and economically vibrant," said Director of Con Ed subsidiary Gas Conversion Group Nick Inga in a statement. As the utility phases out fuel oil to comply with different regulations, it expects to cut direct costs by 40%.
Bigger Duke dividend
Duke Energy (NYSE:DUK) is increasing its quarterly dividend for the sixth straight year. Although the move only increases distributions by 2%, the announcement follows on the heels of a major leadership change for Duke. CFO Lynn Good will assume CEO position later this month, and the new dividend may be a symbolic peace pipe to shareholders concerned about major changes.
"We realize the importance of the dividend payment to our shareholders," said Good in a statement. "One of our primary financial objectives has been to consistently grow the dividend annually. The strength of our balance sheet and significant regulated business mix has allowed us to do exactly that for the past six consecutive years."
Edison International (NYSE:EIX) isn't helping employment numbers this summer -- or this year, even. The utility announced Wednesday that it is laying off 1,100 workers as it begins its decommissioning of the San Onofre nuclear plant in California.
"The premature shutdown of San Onofre is very unfortunate," said Pete Dietrich, SCE's senior vice president and chief nuclear officer, in a statement. "We have an extraordinary team of men and women. We appreciate their years of dedicated service and will continue to extend to them the utmost respect and consideration."
The utility will lay off 600 non-union workers this summer, with 500 more gone by next year. Non-union workers will be the first to go, as Edison works out transition plans for unionized employees.
Is it hot in here?
After President Obama announced his latest climate change policy, utilities responded with an open letter via the Edison Electric Institute. Although the association of shareholder-owned electric companies agreed with many of the president's points, it stressed its concern over Obama's inclusion of existing power plants in future regulations. EEI President Tom Kuhn made clear that environmental policies geared toward existing plants should contain "achievable compliance limits and deadlines," should "minimize costs to customers," and should be "consistent with the industry's ongoing investments to transition to a cleaner generating fleet and enhanced electric grid."
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.
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