The last of the first-quarter earnings have hit investors’ inboxes, turning shareholders’ portfolios topsy-turvy. Let’s look at the latest influx to see if your dividend stocks are about to soar — or sink.
With natural gas’ recent price increase, bad hedges proved a common theme for unsuspecting utilities. Exelon Corporation (NYSE:EXC) took a one-time $235 million hit, but Exelon Corporation (NYSE:EXC)’s and PPL Corporation (NYSE:PPL)’s nuclear fleets will ultimately benefit from more expensive gas.
With a successful $900 million asset sale to Dynegy Inc. (NYSE:DYN) in March, Ameren Corp (NYSE:AEE) has three leftover gas-fired energy centers it still needs to offload.
Its regulated division recently celebrated wins in its Missouri and Illinois transmission services, which should help to keep this dividend stock’s 4.4% yield sustainable for the foreseeable future.
Atlantic Power Corp (NYSE:AT) reported earnings on May 8, beating sales estimates and pulling in positive earnings for the first time since Q2 2011.
Atlantic Power Corp (NYSE:AT)’s stock had been beaten down around 60% since 2013, after dismal Q4 earnings and a severely slashed dividend left investors less optimistic about Atlantic Power Corp (NYSE:AT)’s future. Since then, Atlantic has closed down non-core assets, improved cash flow, decreased short-term debt, and advanced its renewable-energy portfolio.
At its current price, this dividend stock currently offers a 7.2% yield, and investors seem to be willing to give Atlantic another chance. I took a closer look at how its fundamentals, valuation, and business strategy can push its price back up. Its stock is cheap and its business looks better — but I’m not buying yet.
FirstEnergy Corp. (NYSE:FE) reported earnings May 7, exceeding top- and bottom-line expectations. Unlike Atlantic, its priced-for-perfection dividend stock gave less punch to positive news, and investors aren’t elated with FirstEnergy Corp. (NYSE:FE)’s 1.6 debt-to-equity ratio.
With 64% coal capacity and an additional 18% in nuclear, FirstEnergy Corp. (NYSE:FE) is poised for margin expansion as natural gas prices head higher, but it bit the bullet on commodity pricing this past quarter. With a 5.1% yield, FirstEnergy Corp. (NYSE:FE)’s dividend offerings are tip-top — but a lack of energy diversity and high debt should keep investors watchful of this utility’s next moves.
Soar or stumble?
In the past two weeks, every stock except FirstEnergy Corp. (NYSE:FE) has exceeded the Dow Jones U.S. Utilities Index.
Atlantic stock has soared 17%, while Ameren and PPL Corporation (NYSE:PPL) are down slightly. Quarterly earnings reports can prove to be major movers for dividend stocks, but the ever-watchful investor will practice constant vigilance with a long-term perspective. Check back weekly for Foolish updates on your dividend stocks, and you’ll be well on your way to pulling sustainable profits quarter after quarter.
The article Earnings Recap: Did These Dividend Stocks Deliver? originally appeared on Fool.com is written by Justin Loiseau.
Motley Fool contributor Justin Loiseau has no position in any stocks mentioned, but he does use electricity.The Motley Fool recommends Exelon.
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