Questar Ups Dividend by 6% - Analyst Blog

Natural gas-focused energy company, Questar Corp. STR announced a 6% hike in its quarterly dividend rate. The new quarterly dividend amounts to 19 cents per share, a penny higher than the prior quarter payout. The dividend will be paid on Jun 23 to shareholders of record as of Jun 6.

On an annualized basis, Questar's new payout stands at 76 cents per share. The dividend increase follows Questar's first-quarter results, which not only met the Zacks Consensus Estimate of 48 cents but also marked a 17% year-over-year rise. Improvement in the Wexpro and Questar Gas segments, together with a decline in operating expenses aided the results.  

Questar's commitment to deliver value to shareholders is reflected in its history of regular payments. The company has paid dividend in 278 consecutive quarters with 42 hikes in the past 42 years.

Headquartered in Salt Lake City, UT, Questar operates with three principal subsidiaries – Wexpro Company, Questar Pipeline and Questar Gas Company. Post the QEP Resources, Inc. QEP spin-off, the company has transformed itself into a natural gas-operated energy company, which focuses exclusively on exploring natural gas resources while serving customers domestically and worldwide.

Strong performance by the company's business units, Questar's sole emphasis on the natural gas markets and its focus on long-term contracts all work in favor of the company. An above-average credit quality adds to the bullish sentiment. Moreover, consistent robust performance in the trailing quarters adds value to the stock.  

Questar currently holds a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider better-ranked players from the industry such as New Jersey Resources Corp. NJR and AGL Resources Inc. GAS. While New Jersey Resources sports a Zacks Rank #1 (Strong Buy), AGL Resources holds a Zacks Rank #2 (Buy).

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