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Over the course of the last week, two of the higher yielding firms in the energy sector announced the distribution of their regularly scheduled dividends. In this article I think it might be best to examine both companies and demonstrate why either should be considered a viable investment option for those looking to supplement their current streams of income.

Alliant Energy Corp. (NYSE:LNT): Based in Madison, Wisconsin, LNT is a utility holding company, providing regulated electricity and natural gas services to residential, commercial, and industrial customers in the Midwest region of the United States. Over the course of the last 3 months, shares of LNT have traded an average of 441,530 shares per day and currently yields 4.10% ($1.88).

In my opinion there are two things to consider when it comes to Alliant Energy: earnings performance, and recent dividend behavior. The first of these variables is earnings performance and over the past four quarters LNT has surpassed estimates by an average of 0.30%.

When companies, especially those in the energy sector, experience slight beats or even slight misses of less than 2%, I'm not overly concerned due to the fact such beats or misses rarely affect dividend distributions. If things get worse for LNT over the next 12 months and the company misses estimates by a considerably wider margin, or falls into a pattern of consistent misses, I'd look to reduce the size of any position that had been established due to the fact the company's dividend could be affected.

The second variable to consider revolves around the company's recent dividend behavior. Since October 29th, 2008 LNT has increased its dividend a total of four times and by an average of $0.025 per increase each time. The total increase equates to $0.10/share or 28.57% over that period. From an income perspective, the company's current yield of 4.10% coupled with its payout ratio (currently 64.00%) and its continued annual increases could equate into a very viable income option for long-term investors that may be in the market for a steady stream of income.

From a growth perspective, investors should note that Wisconsin Power & Light (the utility arm of Alliant Energy) completed its $400 million dollar purchase of Calpine's (NYSE:CPN) Riverside Energy Center on January 2nd. According to John Larsen, the President of Wisconsin Power & Light, "This purchase is the latest step in the execution of our strategy to balance our generation portfolio in order to manage costs for our customers while remaining flexible for the future". If Alliant can maintain its dividend, while executing a growth strategy centered around its future flexibility, I think a long-term position should be established at current levels. If, on the other hand, Alliant unexpectedly trips up in the near-term, I'd look to begin taking profits at current levels.

Fundamental Overview

The last element investors should consider when it comes to Alliant Energy are the company's fundamentals over the last four quarters. Recent performance will show us that shares of LNT have returned a mere 2.78% since October 15th while trading a premium both its 50-DMA and 200-DMA.

LNT Chart

LNT data by YCharts

For the 12 month period ending September 30, 2012 Alliant has generated $3.55 billion in revenue, while demonstrating solid returns in terms of both assets (3.16%) and equity (9.26%) and maintaining very positive profit (8.69%) and operating margins (14.04%). If Alliant can continue to maintain or even improve on these numbers over the next 12 months share prices could see an upward appreciation.

Northwest Natural Gas (NYSE:NWN): Based in Portland, Oregon, NWN stores and distributes natural gas primarily in Oregon, Washington, and California and operates in two segments, Local Gas Distribution and Gas Storage. Over the course of the last 3 months, shares of NWN have traded an average of 117,939 shares per day and currently yields 4.10% ($1.82).

When it comes to Northwest Natural Gas there are two things to consider: earnings performance, and recent dividend behavior. The first of these variables is the company's earnings performance and over the past four quarters NWN had missed estimates by an average of 15.25%. In most cases I'd be a bit concerned with an average miss of that size, but the company's second quarter was a bit of an anomaly. According to the company's second quarter press release, weather and reduced customer usage played a vital role in the company's lackluster performance.

The second thing for income investors to consider examines the company's recent dividend behavior. Since October 29th, 2008 NWN has increased its dividend a total of four times and by an average of $0.015 per increase each time. The total increase equates to $0.06/share or 11.24% over that period. From an income perspective, the company's current yield of 4.10% coupled with its payout ratio (currently 79.00%) and its continued annual increases could equate into a very viable income option for long-term investors that may be in the market for a steady stream of income.

From both a growth and regulatory perspective, investors should be pleased with the latest decision handed down from the Public Utility Commission of Oregon (OPUC). On October 29th it was announced that OPUC has approved key mechanisms that favored Northwest Natural Gas. According to Gregg Kantor, President and CEO of Northwest Natural Gas who noted that, "While we are disappointed in some of the revenue requirement decisions, we have successfully secured an array of regulatory mechanisms that will help ensure our future strength and stability". If Northwest Natural Gas can successfully demonstrate its ability to generate sustainable long-term revenues as a result of OPUC's decision, I see no reason why a position should not established at current levels.

Fundamental Overview

The final variable investors should consider when it comes to Northwest Natural Gas are the company's fundamentals over the past 12 months. Recent performance will show us that shares of NWN have demonstrated a loss of 10.47% since October 15th while trading in-line with its 50-DMA and at a discount to its 200-DMA.

NWN Chart

NWN data by YCharts

For the 12 month period ending September 30, 2012 Northwest Natural Gas has generated $785.02 million in revenue, while demonstrating positive returns in terms of both assets (3.46%) and equity (8.59%) and maintaining very positive profit (7.73%) and operating margins (18.55%). If Northwest Natural Gas can continue to maintain or even improve on these numbers over the next four quarters shareholder value could experience substantial gains.

Source: 2 Energy Firms Yielding At Least 4%, While Trading On Relatively Low Volume