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."
G.A.Chester has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.