Tags: DTE | Energy | utilities | dividends

DTE Energy: Public Utilities that Pay Dividends

By    |   Friday, 30 Dec 2011 04:03 PM

Like many public utility holding companies, DTE Energy (DTE) has diversified away from its core of regulated utility businesses. However, the company still relies on the public utilities to pay steady dividends to investors.

DTE Energy is the holding company for the electric utility Detroit Edison and the natural gas utility MichCon. Non-regulated business lines include gas storage and pipelines, power and industrial projects, unconventional gas production and energy trading. The Detroit Edison service area is Detroit and southeastern Michigan. MichCon provides gas services throughout Michigan.

For the first nine months of 2011, DTE Energy reported operating revenue of $6.72 billion, up from $6.38 billion a year earlier. Operating earnings for the period were $2.84 per share, up from $2.72.

For the full year, the company is forecast to generate operating earnings of $3.62 per share, compared to $3.60 in 2010. The consensus earnings estimate for 2012 is $3.75 per share.

Utilities drive profits

Although DTE Energy is diversified into several industries, the public utilities generate the bulk of company profits. For the first three quarters of 2011, regulated gas and electric utilities brought in almost 80 percent of operating income. Energy trading was a non-regulated bright spot for the period, increasing earnings to 21 cents per share, up from break-even in 2010.

DTE Energy paid a quarterly dividend of 52 cents, then 53 cents for a period from the end of 1992 until mid-2010. In the five quarters since, the payout has been increased twice to the current 59 cents per share. The $2.36 annual dividend rate gives the stock a 4.4 percent yield.

Recently, the analysts at Credit Suisse increased their rating on DTE to outperform from neutral. In contrast, the Barclays Capital analysts have downgraded the stock to equal weight from overweight.

The company next reports on Feb. 9.

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Like many public utility holding companies, DTE Energy (DTE) has diversified away from its core of regulated utility businesses. However, the company still relies on the public utilities to pay steady dividends to investors. DTE Energy is the holding company for the...
DTE,Energy,utilities,dividends
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2011-03-30
Friday, 30 Dec 2011 04:03 PM
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