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PPL Corp Lights Up!


PPL has reaffirmed its earnings and dividend growth guidance through 2020.

PPL's next dividend should include an increase of about $0.015 (3.6%) per quarter ($0.06 annually).

PPL yields nearly 5.4%.

My wife and I, in our IRAs and trading account, have been friends with PPL since December 2017.  And we've gotten the better end of the bargain.

I became interested in PPL after it fell from its most recent high of around $40 in mid-2017 to the low $30s in December of that year.  Shares were acquired through a combination of direct buys and assigned short puts.

Since then, in 13+ months, we've collected over $4,000 in PPL dividends while remaining about $2,500 to the good on the current value of our PPL shares.  PPL is our largest position, by far.

Not only is PPL a steady-earning, high-yielding utility stock, it's an acclaimed energy provider in both the US and the UK, consistently earning high marks for customer service.

Yes, many financial wizards caution that PPL's UK exposure will limit its ability to grow earnings and, therefore, limit investors' returns.  And that may well be true, but it remains to be seen.

As of now, PPL is both reaffirming and delivering on its previously published plans to grow earnings and the dividend.

PPL reports fourth quarter and full-year 2018 results on February 14, 2019.  I expect the company to announce a dividend increase of $0.015 that day, as well, which would push the payout to $1.70 per year, a very comfortable number.  At its current share price of $30.80, that makes the yield 5.5 percent.

Our current PPL positions are a mix of covered calls timed to take advantage of dividend dates, and short puts.  Should some of our covered positions be assigned, I plan to use the proceeds to sell cash-secured puts or naked puts (depending on the type of account) for immediate gain, PLUS the potential to reacquire PPL shares at better prices.

As always, best of luck in all your trading and investing endeavors.

Disclosure: I am/we are long PPL.

Additional disclosure: Also short both PPL puts and calls.