Dividends4Life: A Dividend Star on The Rise

A Dividend Star on The Rise

Posted by D4L | Wednesday, October 19, 2011 | | 0 comments »

Recently, we have been adding to our NEE holdings because we believe the stock has a very bright future and our Dividend Valuation Model (above) indicates the stock is approximately 20% undervalued. Even with President Obama's pullback on more stringent EPA emissions standards, existing clean air regulations are forcing more and more electric utilities to close old, less efficient coal-fired generating plants and abandon new coal-fired plants. The bottom line is that many Midwestern power companies are scrambling to gain access to clean and renewable energy sources, and NEE has it for sale.

Here is a short list of other reasons why we like NEE:

1. Current dividend yield is near 4%.
2. 5-year dividend annual growth of just under 8%.
3. Projected 3-5 year dividend growth of near 6%.
4. Current dividend payout ratio is near 50%, much lower than industry average of 70%.
5. Paid a dividend since 1990
6. Increased its dividend for 15 consecutive years.
7. Stock is currently selling at a PE of 12, much lower than the industry average of 15.
8. Company operates in 26 states mainly in the growing southern region of the US.
9. One of the most forward thinking management teams in the industry.

Source: Rising Dividend Investing

Related Articles:
- Increasing Dividend Yield Part VI: Time
- Increasing Dividend Yield Part V: MLPs
- Increasing Dividend Yield Part IV: Bonds
- Increasing Dividend Yield Part III: Preferred Stock
- Increasing Dividend Yield Part II: REITs

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