(04-02-2020, 01:19 PM)fenders53 Wrote: I'm pleased to hear that. A UTE with no Div, or a significantly reduced Div does not have a bright near-term future.
CNP cut the dividend to $0.14 per quarter, which is a yield of 4.06%. It also drops the payout ratio to about 40% of current EPS estimates for 2020.
Might actually be a time to buy rather than sell on the cut.
Commentary from the company:
"In light of Enable's recent distribution decrease, this reduction in CenterPoint Energy's common stock dividend strengthens CenterPoint Energy's business risk profile by significantly reducing the company's reliance upon cash distributions from Enable," said John W. Somerhalder II, interim president and CEO. "We anticipate utility earnings contribution will approach 90% for 2020 and increase to nearly 100% over the next few years. The net result of today's actions supports CenterPoint Energy's firm commitment to maintaining investment grade credit quality and our continued strategic focus on growing utility earnings contribution."
and this:
"A targeted reduction in the company's quarterly common stock dividend from $0.2900 per share to $0.1500 per share, targeting a 50% - 55% utility earnings payout ratio"
Looks like dividend growth may actually exceed EPS growth going forward if they are targeting a 50-55% payout ratio.