Dominion Vs. PPL: Which 4%+ Yielding Dividend Achiever Utility Is Better?

Dominion Resources (D) and PPL Corp. (PPL) have a lot in common. They are both in the utility sector, and both stocks have 4% dividend yields.

Plus, Dominion and PPL are both members of the Dividend Achievers list, a group of 272 stocks with 10+ years of consecutive dividend increases. You can see the full Dividend Achievers List here.

That said, not all utility stocks are created equal.

Dominion and PPL have slightly different business models. While PPL is a pure-play electric utility, Dominion has a large midstream energy transportation business.

That difference could make Dominion a better dividend growth stock moving forward.

This article will compare and contrast these two Dividend Achievers from the utility sector.

Business Overview

Dominion’s assets include 26,000 megawatts of electricity generation, 14,000 miles of natural gas pipelines, and 6,500 miles of electric transmission lines.

Dominion’s exposure to the energy transportation business is through Dominion Midstream (DM). Dominion owns the general partner, and approximately 65% of the limited partner, of Dominion Midstream.

2016 was a good year for both companies. Dominion’s reported, GAAP earnings-per-share increased 7.5% in 2016, to $3.44.

D Earnings

Source: 2016 Earnings Presentation, page 3

Operating earnings-per-share increased 10% to $3.80. Operating earnings-per-share is a non-GAAP which excludes non-recurring charges such as future ash pond and landfill closures.

PPL also had a very good year in 2016. Operating earnings-per-share rose 10% from the previous year. Growth was fueled by its regulated utility businesses.

PPL’s Kentucky and Pennsylvania regulated businesses increased earnings-per-share by 14% and 35%, respectively, in 2016.

In all, this was the seventh year in a row in which PPL exceeded the midpoint of its operating earnings guidance.

One disadvantage for PPL is its geographic focus. As the result of a $5 billion merger with a U.K. electricity distribution company several years ago, PPL has a significant U.K. business.

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Disclosure: Sure Dividend is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities.

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