Xcel Energy’s Forward Yield Falls: Stock Touches New Highs

Xcel Energy’s Growth May Perk Up If Regulatory Lag Is Addressed

(Continued from Prior Part)

Xcel Energy: Forward dividend yield

In the previous part of this series, we looked at Xcel Energy’s (XEL) debt profile. Now let’s have a look at XEL’s forward dividend yield. Xcel Energy is currently trading at a forward dividend yield of 3.3%. A company’s forward dividend yield is calculated by dividing its estimated one-year future dividend per share by its market price per share.

XEL trades at a lower yield to its historical average

Xcel is trading at a lower forward yield compared to its own three-year average historical yield. The impressive rally, which started early this year, could be one of the reasons. Its average historical yield is 4.1%.

Utilities, particularly regulated ones, generally trade in a similar range. Peer utilities operating in neighboring Michigan, including CMS Energy (CMS) and DTE Energy (DTE), are currently trading at forward dividend yields of ~3.3%. Regulated utilities (IDU) tend to have lower yields compared to unregulated ones since regulated utilities generally have somewhat stable earnings. On the other hand, Entergy (ETR) and FirstEnergy (FE) have forward yields near 4.5%.

Xcel Energy makes up 3.4% of the Utilities Select Sector SPDR ETF (XLU). XLU mainly focuses on regulated utilities, although it also invests in unregulated utilities and merchant power players.

To learn more about forward yields of regulated utilities, read Regulated Utilities: Trading at Discount to Historical Yields.

We’ll see a more comprehensive picture of forward yields and dividend growth of mid-sized utilities (FXU) in the next part of this series.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - A Look at Xcel Energy’s Geographical Presence and Operations

• Part 2 - Is There Any Upside Left in Xcel Energy after a Stellar Rally?

• Part 3 - How Can Xcel Energy Combat Flat Revenues?