PPL Corporation

PPL Corporation (PPL) is a utility headquartered in Allentown, Pa. The company website says PPL controls or owns about 19,000 megawatts of generating capacity in the United States, sells energy in several U.S. markets, and delivers electricity and natural gas to about 10 million customers in the United States and the United Kingdom. “With a diverse mix of fossil-fuel, nuclear and renewable energy facilities, our competitive-market generation fleet is positioned for success when wholesale power markets rebound.”

PPL companies include Kentucky Utilities, Louisville Gas and Electric, PPL Electric Utilities, PPL EnergyPlus, PPL Generation, PPL Montana, and PPL Global (U.K).

On November 8, 2012, PPL announced third quarter earnings of $.61 per share, compared with $.76 per share for the third quarter of 2011.  Earnings for the first nine months of 2012 were $2.00 per share, compared with $1.91 in 2011.  The company adjusted its 2012 forecast range of EPS from ongoing operations to $2.30 to $2.40. In the third quarter earnings call, CEO William Spence said, “...our rate-regulated businesses are providing financial stability as we continue to effectively manage through challenging wholesale market power crisis.”

Morningstar indicates PPL’s long-term debt as a percentage of capital is 60.8%.  PPL’s current quarterly dividend is $.36, for an annual rate of $1.44.  At the December 24, 2012 closing price of $28.92, the yield is 5.0%. PPL has a good history of steady dividend increases except for 2011, which maintained the same $.35 quarterly dividend that was paid throughout 2010. The company has paid $.36 per quarter for the past four quarters.  Except for 2011, the company has increased the dividend beginning with the March payment. If PPL continues the trend that was resumed in 2012, there should be an announcement of a dividend increase in the coming weeks.

I own shares of PPL in a retirement account for dividend income and I would consider buying more at $26.67 or less.  I would consider selling some of the shares at $36 or more.  I will adjust these figures if PPL continues its pattern of increasing its dividend in the first quarter.

I think PPL is a company worth investigating for inclusion in a dividend portfolio. As always, this is not a recommendation to buy, but a suggestion for a stock to study. Use your own judgment.