Going forward the energy sector in the United States is likely to receive a lot of attention, given how the world is evolving and how important climate change has become. Currently there are several companies operating in this space that present both long-term track records and very high dividend yields.
Take SCANA Corporation (SCG) for example. The company has a 160 year track record of supplying energy to South Carolina, North Carolina and Georgia. The company currently trades on a dividend yield of around 5%. This is not bad going for a company which is trading on a forward price to earnings (PE) multiple of just over 12 times.
Headquartered in Cayce, South Carolina, SCANA Corporation (SCG) is a Fortune 500 energy-based holding company, with $12 billion in assets. The company supplies around 659,000 electric customers and more than 1 million gas customers making it the dominant player in the region. The company has a market cap of $4.6 billion.
In May the company reported first quarter earnings of $127 million, or $1.02 per share, compared to $114 million, or $0.94 per share, for the first quarter of 2009, for an 8.5% increase. SCANA (SCG) also stuck to its previous earnings guidance that 2010 earnings will be in the range of $2.85 to $3.05 per share. 2009 earnings per share came in at $2.85.
Jimmy Addison, senior vice president and chief financial officer of SCANA (SCG) also indicated that the company had seen further signs of an economic rebound in their business. "In our regulated gas operations at SCE&G and PSNC Energy, where we have had weather normalization mechanisms for an extended period, the effects of weather on earnings and customer’s bills were substantially tempered. However, we saw very favorable weather related earnings at SCANA Energy Georgia. Additionally, we reported continued customer growth and higher non-weather related consumption across our system, indicating signs of an economic recovery consistent with other reports,” Addison told shareholders.
Future earnings will also be boosted after the Public Service Commission of South Carolina agreed at the end of June 2010 that it had approved an overall increase of 4.88% to retail electricity rates, which is to boost earnings by around $101 million over the next three years.
The company has also made some promising moves into nuclear energy which it expects to drive earnings in the future in line with President Obama's demands for increased electricity supply and cleaner energy sources.
SCANA (SCG) gives investors a nice mix of electricity, natural gas and nuclear energy in their portfolio and coupled with a high dividend yield, the company may be an attractive addition to defensive portfolios.
Add your Comment
or use your BestCashCow account