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4 Stocks With Sluggish Dividend-Growth Potential

These utilities will struggle to increase their dividends.

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Many of the utilities we cover have strong growth prospects and healthy financials that should allow them to easily grow their dividends. For a few utilities, however, dividend growth may be more challenging.

Hawaiian Electric's shareholders were treated to a rare dividend increase of 3.2% in the first quarter of 2019--the first in 20 years--and a similar increase in 2020. Once past the impact from COVID-19, which likely will result in no increase in 2021, we project average annual increases of roughly 3% for 2022 through 2024. Hawaiian Electric continues to be a confusing story for investors, as it derives roughly two thirds of consolidated earnings from an electric utility and about one third from Hawaii-based American Savings Bank. The Hawaiian economy, driven in large part by tourism, affects both businesses. And that reliance on tourism will weigh on Hawaiian's dividend growth.

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