What happened?
The flame continues to burn, for now. One of the steadiest and most reliable dividend payers in the utility sector, Piedmont Natural Gas (NYSE:PNY), has raised its quarterly distribution. The company will pay $0.34 per share, an amount 3% higher than its predecessor.


This cements its status as a Dividend Aristocrat, one of the relatively few stocks on the market that have raised their payouts at least once annually for a minimum of 25 years running. The upcoming distribution will mark the 38th year in a row it has enacted an increase.

At the current share price, Piedmont's newly declared dividend yields 2.3%. That's slightly better than the average yield of dividend-paying stocks on the S&P 500 index, which at the moment stands at 2.1%. The new distribution is to be handed out on April 15 to shareholders of record as of March 25.

Does it matter?
Piedmont's latest -- and very possibly, last -- dividend increase shouldn't jostle the stock price too much. After all, the company's about to be subsumed into Duke Energy (NYSE:DUK), which is funnily enough the utility it was spun out from in 1951.

The $4.9 billion Duke Energy acquisition was announced last October, and since then, Piedmont's stock has fluctuated in a narrow band just under the purchase price, which shakes out to roughly $60 per share. A raised dividend, particularly to this typically modest degree, won't change that.

It will be a shame, though, to see a reliable old dividend-raiser depart from the ranks of the Aristocrats. Piedmont will still operate under its current name but as a Duke Energy subsidiary. According to the acquirer, the "enhanced regulated cash flows" resulting from the tie-up will contribute to Duke Energy's payout.

For Duke Energy shareholders, that could mean a nice lift to their company's dividend once the merger closes. As it stands, the utility already pays a relatively generous quarterly distribution (just under $0.83 per share) that yields 4.2%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.