Why PPL Corporation is a Solid Long-Term Dividend Stock

Dividend stocks are popular amongst investors due to the potential for high yields in the long-term. There are plenty of companies out there that pay out dividends to investors, but some are a better option than others. It is important to assess various aspects of a company before deciding to invest, such as its history, its stability, and the future potential of a company. One company in which you may consider investing is PPL Corporation (NYSE:PPL). Here is an overview of this company and why it is a sound dividend stock for long-term investment.

What You Need to Know

PPL Corporation is an energy company based in Pennsylvania that delivers electricity to 10.5 million customers across Pennsylvania, Kentucky, and Great Britain. It also delivers natural gas to 321,000 customers in Kentucky. The company was founded in 1920, and its president, chairman, and chief executive officer is William H, Spence. The fact that this company has been in business for almost 100 years is one reason that it is a good investment. It has a long history and is well-established in the utility industry. Being a part of this industry is a second factor that makes it a stable option for investment. This is an industry that has a constant demand as customers always need energy. Industry regulations add to the stability of the major players in the utility sector.

Furthermore, PPL Corporation’s diversification into natural gas rather than just electricity has given the company even greater stability. There is an increasing demand for natural gas supplies, and this contributes to an optimistic outlook for PPL Corporation over the next decade. Also, there is a move away from dirty sources of energy, such as coal, and a move towards clean energy, such as natural gas. Therefore, it is significant that PPL Corporation is making steps in the right direction, although they are a little behind some of the larger utility companies in making the move towards a focus on clean energy. Another reason why this company is a stable investment option is that PPL Corporation has expanded its geographical customer base to include customers from the United Kingdom. This is since the acquisition of E.ON’s distribution company Central Networks back in 2011. Approximately 60 percent of the company’s electricity customers are in the United States, while the remaining 40 percent are in the United Kingdom. Even though PPL Corporation is a smaller company than many of its competitors, this split customer base makes it stand out from its competitors.

Payout History

Of course, what many investors are interested in is a company’s dividend payout history, whether it delivers high yields, and the potential dividend payouts they will receive in the future. PPL has a long and solid history of dividend payouts. According to The Motley Fool, the dividend payout rate has consistently increased for the last 17 years. Looking at the rate of this increase over the last decade, it has grown in line with the rate of inflation. Even if it doesn’t grow, this trend shows that investors’ buying power is protected. It is also in the group of companies that consistently delivers payouts over five percent, with current payout rates higher than seven percent.

It is worth noting that PPL Corporation is spending $15 billion on its growth plans between 2018 and 2022. Due to this investment, the company’s management expects a growth rate of around five or six percent in the next two years. In turn, this will support dividends tracking inflation and maintain the buying power of investors over time. This positive rate of growth is good for both the company and for investors. Simply Wall Street notes that it is important to look at a company’s cash flow to determine if they can continue to support paying out increasing dividends to investors in the future. PPL paid out 63 percent of its profits to investors in 2018. In the past, they have aid out more than 70 percent of their profits. In terms of cash flow, PPL Corporation reported negative cash flow in 2018, but this is not a long-term situation for the company.

Company Dividends

The volatility of dividends is another consideration. Looking at the current cash flow and the dividend history of the company can help to predict future dividend trends and the potential for growth. If a company struggles financially, then your dividends will shrink and your investment declines. The history of PPL Corporation in the last decade shows that this is not a volatile dividend stock due to its slow and steady growth and the company’s stability. While this may seem a boring option, its stable history is impressive enough to make it a solid option. According to NASDAQ Dividend Channel has named PPL Corporation as a top 10 dividend-paying utility stock. In their report, Dividend Channel compared PPL Corporation to other companies in the utility sector. They noted that PPL Corporation displays both strong profitability metrics and attractive valuation metrics. Other key fundamental data points that were mentioned in the report were the favorable long-term multi-year growth rates and the strong quarterly dividend history. Like other financial experts and analysts, they noted the solid dividend payout history of the company.

Overall, there are several factors that make PPL Corporation a solid dividend stock option to add to your portfolio. This company has a good growth outlook over the next couple of years and the company has a consistent history of dividend payouts and payout growth that is beating inflation. The inexpensive share price makes this an option worth considering now. The high yields and the positive predictions for the company mean that PPL Corporation is a solid, if not exciting, dividend stock option for the long-term. Most financial experts agree that an investment in this company is a sound option.

Add Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

The 20 Best Joseph Campbell Quotes That Apply to Business
The 20 Best Kurt Cobain Quotes That Apply to Business
John Mulaney
The 20 Best John Mulaney Quotes That Apply to Business
Colin Huang
10 Things You Didn’t Know about Colin Huang
How to File for Unemployment in Vermont
How to File For Unemployment in Utah
How to File for Unemployment in Tennessee
South Dakota
How to File for Unemployment in South Dakota
Cedar Point
The 20 Best Things to do in Sandusky, OH for First Timers
USS Alabama Battleship Memorial Park
The 20 Best Things to Do in Mobile AL for First Timers
San Augustin Church and Museum
The 20 Best Things to Do in Manila, Philippines for First Timers
Wineries in a Carriage
The 20 Best Things to Do in Temecula, CA for First Timers
INEOS Grenadier 3
10 Things You Didn’t Know about The INEOS Grenadier
2021 Dodge Durango SRT Hellcat
A Closer Look at the 2021 Dodge Durango SRT Hellcat
2021 Ford F-150 1
A Closer Look at the 2021 Ford F-150
2021 Ram Rebel TRX
A Closer Look at The 2021 Ram Rebel TRX
A Closer Look at The Maurice de Mauriac L3 Chronograph Red Crystal
Romain Gauthier Insight Micro-Rotor Squelette
A Closer Look at The Romain Gauthier Insight Micro-Rotor Squelette
Montblanc Star Legacy
A Closer Look at The Montblanc Star Legacy Orbis Terrarum
A Closer Look at the Artur Akmaev Rise of the Blue Dragon Watch
Rory McIlroy
How Rory McIlroy Achieved a Net Worth of $150 Million
Don Cheadle
How Don Cheadle Achieved a Net Worth of $35 Million
Rob Zombie
How Rob Zombie Achieved a Net Worth of $50 Million
Maddie Ziegler
How Maddie Ziegler Achieved a Net Worth of $5 Million