Xcel Energy Inc. Board Increases 2024 Common Dividend 5.3%, Declares Dividend on Common Stock

Rhea-AI Summary

Xcel Energy Inc. (XEL) increases its quarterly dividend by 5.3% to 54.75 cents per share, marking the twenty-first consecutive year of dividend growth. The company sets a long-term dividend payout ratio target of 50-60% and aims for 5-7% annual dividend and earnings per share growth.

Insights

Financial Analyst

The announcement by Xcel Energy Inc. of a dividend increase to $0.5475 per share reflects a positive signal to investors about the company's financial health and commitment to returning value. This 5.3% increase is particularly notable as it marks the twenty-first consecutive year of dividend growth, which can be seen as a testament to Xcel Energy's consistent performance and strategic financial management. The established dividend payout ratio target of 50-60 percent aligns with the industry standard for utilities, which typically maintain higher payout ratios due to their stable cash flows and lower reinvestment needs compared to other sectors.

Investors often view utilities as defensive investments, especially during volatile economic periods, due to their reliable dividends and inelastic demand for their services. Xcel Energy's reaffirmation of a 5-7 percent annual growth objective for both dividends and earnings per share suggests a balanced approach to capital allocation, aiming for sustainable growth and shareholder returns. However, it is crucial to monitor how this strategy will be supported by the company's operational performance and whether it can maintain this growth without compromising its financial stability.

Energy Market Analyst

Xcel Energy operates within a heavily regulated industry, where changes in policy and regulatory environment can have significant implications for the company's operations and financials. The company's ability to increase dividends consistently is indicative of not only its financial health but also its regulatory strategy and the stability of its operational regions. As an energy provider across 8 Western and Midwestern states, Xcel Energy must navigate various regulatory landscapes, which can impact its cost structure and revenue potential.

The company's comprehensive portfolio of energy-related products and services, along with its customer base of 3.8 million electricity and 2.2 million natural gas customers, provides a diversified stream of revenue. The emphasis on both electricity and natural gas suggests resilience to fluctuations in energy demand and pricing. However, the transition to renewable energy sources and the associated capital expenditures required to update infrastructure and comply with environmental regulations could influence future financials and the ability to maintain dividend growth.

MINNEAPOLIS--(BUSINESS WIRE)-- The Board of Directors of Xcel Energy Inc. (NASDAQ: XEL) today raised the quarterly dividend on the company’s common stock from 52 cents per share to 54.75 cents per share, which is equivalent to an annual rate of $2.19 per share. The dividends are payable April 20, 2024, to shareholders of record on March 15, 2024.

“Today’s dividend increase of 5.3% marks the twenty first consecutive year that Xcel Energy has increased its dividend. It signals the strength of our business and our recognition of the importance of dividend growth to our shareholders,” said Bob Frenzel, chairman, president and CEO of Xcel Energy.

“In addition, we have established a long-term dividend payout ratio target of 50-60 percent. Our dividend growth and earnings per share growth objectives remain 5-7 percent annually,” said Frenzel.

Xcel Energy is a major U.S. electricity and natural gas company, with operations in 8 Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.8 million electricity customers and 2.2 million natural gas customers through its regulated operating companies. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.

This information is not given in connection with any sale or offer for sale or offer to buy any securities.

Statements in this press release regarding Xcel Energy’s business which are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company's Annual Report on Form 10-K for the most recently ended fiscal year.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240221147052/en/

Xcel Energy, Minneapolis

Shareholder Services

Darin Norman (612) 337-2310

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Paul Johnson, Vice President, Treasurer & Investor Relations (612) 215-4535

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Xcel Energy Media Relations Representatives (612) 215-5300

Source: Xcel Energy

FAQ

What is the new quarterly dividend for Xcel Energy Inc. (XEL) after the increase?

Xcel Energy Inc. (XEL) raised its quarterly dividend from 52 cents per share to 54.75 cents per share.

When are the dividends payable to Xcel Energy Inc. (XEL) shareholders of record?

The dividends are payable on April 20, 2024, to shareholders of record on March 15, 2024.

How many consecutive years has Xcel Energy Inc. (XEL) increased its dividend?

Xcel Energy Inc. (XEL) has increased its dividend for twenty-one consecutive years.

What is the long-term dividend payout ratio target set by Xcel Energy Inc. (XEL)?

Xcel Energy Inc. (XEL) has established a long-term dividend payout ratio target of 50-60%.

What are the dividend and earnings per share growth objectives of Xcel Energy Inc. (XEL)?

Xcel Energy Inc. (XEL) aims for 5-7% annual dividend and earnings per share growth.