Turnarounds are hard to execute. The bulk of best-laid plans end up failing, with many firms never realizing their potential. But when they do, investors can reap plenty of rewards. They can even score some hefty income as the case may be with our latest Best Dividend Capture Pick. Thanks to its turnaround plan, our pick has returned to dividend growth, recently increasing its payout by nearly 4%!
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick is one of the largest investor-owned utilities in the nation, with over six million customers across the Midwest and Mid-Atlantic states. Our pick owns plenty of generation assets as well as key transmission lines in the region. Steady demand and strong economic conditions in its main operating region have continued to provide plenty of cash flows to its bottom line.
Where things have changed for our pick has been the removal of some legal overhangs and some very expensive legacy assets—and their debt—from its balance sheet. After the firm was rocked by a scandal, the last couple of years has been about rebuilding, paying settlements, and moving forward. With the bankruptcy of one of its subsidiaries, our pick is now free to rebuild its business.
And it has on that front, announced new plans to improve its transmission network, add smart-grid technology, and increase the number of renewables in its generation fleet. That should help provide plenty of rate increases for its regulated fleet.
The combination of these factors has reignited interest in our pick’s ability to be a top dividend player. As such, it’s quickly becoming a great dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Monday, May 6, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 6.2 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest utility stock could be a lucrative option.
