Feb 18 - Bernstein Research said dividends of at least 11 more
U.S. utilities were at risk of future cuts, after public
utility holding companies like Ameren Corp (AEE.N) and Great
Plains Energy Inc (GXP.N) slashed their dividend payouts by 39
percent and 50 percent, respectively.
Historically, investors have gotten the bulk of their
returns on utility stocks from dividends rather than capital
gains, the brokerage said.
"Utilities' dividend paying capacity is therefore critical
in assessing potential long run returns," Bernstein analysts
led by Hugh Wynne wrote in a note to clients.
The analysts lined up 47 publicly traded utilities and
ranked them on the basis of the degree of risk posed to their
future dividends.
While the list pegs utilities like PNM Resources Inc
(PNM.N) and Constellation Energy (CEG.N) at the most risk for
cutting dividend, Sempra Energy (SRE.N) and largest U.S.
nuclear power company Exelon Corp (EXC.N) have been ranked as
the least risk prone.
The rankings are based on the companies' ability to sustain
their dividend payouts in tandem with their ongoing capital
expenditure commitments, analyst Wynne said.
Announcing its fourth-quarter results on Wednesday,
Constellation Energy said it would cut its quarterly dividend
by 50 percent to 96 cents per share.
On Feb. 11, Great Plains halved its quarterly dividend
payment to $0.2075 a share to help it "reduce reliance on
external capital to fund its construction expenditures and
other activities."
The following lists the utilities which are most risk-prone
to dividend cuts:
COMPANY NAME TICKER PNM Resources
(PNM.N)
Constellation Energy (CEG.N)
Unisource Energy (UNS.N)
Empire District Electric (EDE.N)
CMS Energy (CMS.N)
UGI Corp (UGI.N)
Integrys Energy (TEG.N)
TECO Energy (TE.N)
Progress Energy (PGN.N)
UIL Holdings (UIL.N)
Xcel Energy (XEL.N)
(Reporting by Shradhha Sharma in Bangalore; Editing by
Gopakumar Warrier)
