Public Service Enterprise Group Inc. (PEG) is a diversified energy business that distributes electricity and natural gas to customers in New Jersey and produces low-cost energy using nuclear, gas, oil-fired and renewable generation assets.
The company’s PSE&G division accounted for 69% of consolidated revenue, generating revenue from electricity (47%), gas (25%) and transmission (22%), whereas its PSEG division accounted for 38% of consolidated revenue, generating revenue from largely electricity (62%) and gas (24%) sales to third parties and affiliates during fiscal year 2020.
Navigating COVID-19
Public Service Enterprise Group reported fourth-quarter revenue that fell by 3.2% to $2.4 billion, missing consensus estimates by $430 million, along with non-GAAP earnings of $0.65 per share, beating estimates by 26 cents. While PSE&G held up during the pandemic, PSEG Power took a hit from weather and its ongoing decarbonization efforts.
The good news is that the company’s dividend remains intact. With a century-long history of making dividend payments, the company maintains a 59.7% payout ratio, suggesting that it remains very capable of making payments moving forward. The economic recovery could further boost its dividend amounts as earnings return to pre-pandemic levels.
The company raised its quarterly dividend by 4.1% to $0.51 per share, which represents a 3.7% forward yield. The dividend is payable on March 31, 2021 to shareholders on record as of March 9, 2021.
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