Utilities have been busy this week, making moves to maximize profit potential. With dividend updates, new solar projects, and a tough macro week for utilities, here's what you need to know to stay on top of your dividend stocks' latest moves.
Dividends are hardly news in the utilities sector, but an announcement never fails to bring a bit of relief during these volatile times. Dominion Energy (NYSE:D) has certainly done its part, declaring its 342nd consecutive quarterly dividend earlier this week. The utility's latest quarter missed on earnings, but its stock has headed steadily higher through tough economic times. With a current annual yield of 3.7%, shareholders should be happy with this latest distribution.
Atlantic Power (NYSE:AT) also kept its monthly dividend steady for August. The utility hit hard times in March, when it slashed its distribution 66%, but the move seems to have put Atlantic in a better place than investors or analysts had expected. The company has managed to beat earnings estimates for the past two quarters. Still, the utility's got some substantial work ahead before its books match my own expectations.
It's always sunny in ... Michigan and San Francisco?
DTE Energy (NYSE:DTE) announced this week that it has selected an additional 67 solar projects for a pilot project examining the potential for individual customer-owned solar units. The utility has experimented with this idea before and currently has 600 customers adding on around 5 MW of capacity to DTE's energy portfolio.
Vice President Irene Dimitry pointed to nearly $2 million in incentives as a lure for many consumers. For DTE's part, the projects put the company closer to hitting Michigan's renewable-energy goals. But with more than 11,000 MW and $26 billion in assets to its name, DTE's expansion paints a future possibility for profits, rather than affecting the company's value add today.
But solar expansion is necessarily small, and DTE's not the only one adding on capacity megawatt by megawatt. Duke Energy (NYSE:DUK) also announced this week that it has acquired a 4.5 WM San Francisco solar project from developer Recurrent Energy. The city, whose utilities commission signed a 25-year power purchase agreement with Duke, welcomed the move.
"With the addition of this project, we continue to grow our solar footprint in California," said Duke Energy Renewables President Greg Wolf in a statement. "As this asset continues to contribute to the state and city's renewable energy goals for years to come, we look forward to being a positive presence in this community."
Duke has steadily ramped up its solar initiatives in recent years and currently has more than 100 MW of capacity spread across 16 projects. Since 2007, the utility has invested more than $3 billion in wind and solar farms.
Dividend stocks overall took a hit this week as bond returns headed higher. The yield on 10-year U.S. Treasury notes rose to a two-year high, shifting "safety investors" away from riskier dividend stocks. From a year-to-date 15% gain earlier this month, the Dow Jones U.S. Utilities Index dropped back down to 8.5%.
Every investor needs a balanced portfolio, and bonds are most likely a part of your own. Long-term investors will use this diversity to their advantage, and a dip in dividend stocks this week is hardly an exit sign for savvy shareholders.
Stay current on electricity
With solar sneaking in and bonds breaking the bank, the world of utilities continues to change at a faster rate than ever before. 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.