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Now That FirstEnergy Increased Their Dividend, Are They An Undervalued Dividend Growth Stock?

Published Thu, 15 Nov 2018 09:36:04 -0500 on Seeking Alpha

Maybe it is because the company is local for me, but FirstEnergy Corp (NYSE: FE) has been in the news a lot in 2018. I initially purchased shares in the utility company back in 2013 and it has been quite the roller coaster ride since then.
Initially after my purchase, things were not the greatest. But over the last year, the company has continued to make strategic moves to improve the company's balance sheet, financial performance, and most importantly to me and other dividend growth investor's, their dividend. So let's review FirstEnergy to determine if the company is considered an undervalued dividend growth stock based on the metrics of the Dividend Diplomats' Dividend Stock Screener.
Before I start discussing the moves that have been made in the current year, I felt it was important to discuss when the bad news initially started in January 2014, not too long after my initial purchase. In the Letter to the Shareholders that accompanied the earnings release, the following statement was prominent:
"This revised quarterly dividend rate equates to an annual dividend of $1.44 per share. The previous dividend rate was $0.55 per share quarterly and $2.20 per share annually."
FirstEnergy had slashed their dividend. The worst news for dividend growth investors. At the time, the company had a payout ratio near 100% (or exceeding based on which EPS projection used) and had some significant concerns about the growth and performance of one of the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
DUKE ENERGY 89.03   21.7 4.11 3.78 4.18
AMERICAN ELECTRIC POWER 90.51   21.9 4.14 2.68 2.97

DUKE ENERGY - DUK
DUKE ENERGY - DUK  


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