Chesapeake Utilities Ramps Up Dividend By 8.6%

Chesapeake Utilities Corp. (CPK) announced that it is shoring up its dividend by 8.6% at a time when many corporates around the world are slashing dividend payouts to preserve cash buffers during the coronavirus pandemic.

Chesepeake said its Board of Directors agreed to increase the quarterly cash dividend on the company’s common stock to $0.44 per share from $0.405 per share previously. The decision pushes the 2020 annualized dividend payout up $0.14 per share to $1.76 per share.

“Over the last five years, we have made significant capital investments that have fueled our earnings growth while providing dividend growth in the top 10% of the utility industry,” said Jeff Householder, President and CEO of Chesapeake. “The Board’s dividend decision reflects the company’s commitment to dividend growth supported by earnings growth, while still maintaining ample liquidity to drive growth and fund operations.”

The $0.44 per share dividend will be payable on July 6 to all shareholders of record at the close of business on June 15, 2020.

The natural gas distributor said that the $0.14 per share increase in the annualized dividend aligns its five-year earnings growth rate of 9.4% from continuing operations with its five-year dividend growth rate of 8.9% including this most recent increase.

The company has paid dividends to its shareholders for 59 years. This latest increase represents the 17th consecutive year in which the dividend has been raised and will result in Chesapeake having doubled its annualized dividend over the last ten years.

The energy company’s shares advanced 1.2% to $84.33 on Thursday, trimming this year’s decline to 11%.

Wells Fargo analyst Sarah Akers lowered Chesapeake’s price target to $87 from $93 while maintaining a Hold rating.

TipRanks data shows that Wall Street analysts are divided over Chesapeake’s stock as 2 say Buy and 2 say Hold adding up to a Moderate Buy consensus rating. The $102 average price target indicates 21% upside potential in the shares in the coming 12 months. (See Chesapeake stock analysis on TipRanks)

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