Our analysis is based on comparing MGE Energy, Inc. with the following peers – DTE Energy Company, CMS Energy Corporation, Alliant Energy Corp, Xcel Energy Inc., WEC Energy Group Inc, American Electric Power Company, Inc., Ameren Corporation, ALLETE, Inc. and Otter Tail Corporation (DTE-US, CMS-US, LNT-US, XEL-US, WEC-US, AEP-US, AEE-US, ALE-US and OTTR-US).
MGE Energy, Inc.’s dividend yield is 1.88 percent and its dividend payout is 57.33 percent. This compares to a peer average dividend yield of 3.24 percent and a payout level of 66.02 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 67 out of a possible score of 100 looks sustainable.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2016), MGEE-US paid a high quality dividend, which represents a yield of 1.86% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 3 were high quality, 1 was medium quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 2.70x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to September 30, 2016), MGEE-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 3.57x), investing cash flow (coverage of -2.05x), issuance cash flow (coverage of -0.10x) and twelve-month prior cash (coverage of 2.28x), for a total dividend coverage of 3.70x.
MGEE-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -0.10x).
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||3.24||3.05||2.78||2.43||2.49||1.88|
|Dividend Payout (%)||57.4||55.75||49.55||47.78||56.07||57.33|
A complete list of metrics and analysis is available on the company page.
MGE Energy, Inc. provides natural gas and electric services. The company operates its business through following segments: Regulated Electric Utility Operations, Regulated Gas Utility Operations, Non-Regulated Energy Operations, Transmission Investments and All Other. The Regulated Electric Utility Operations segment engages in generating, purchasing, and distributing electricity. The Regulated Gas Utility Operations segment engages in purchasing and distributing natural gas. The Non Regulated Energy Operations segment engages in owning and leasing electric generating capacity. The Transmission Investments segment represents investment in American Transmission Company LLC, a company engaged in the business of providing electric transmission services primarily in Wisconsin. The All Other segment invests in companies and property that relate to the regulated operations and financing the regulated operations. MGE Energy was founded in 2001 and is headquartered in Madison, WI.
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