Summary
- PPL has a history of paying consecutive quarterly dividends since 1946 and has raised its dividend 17 times in the past 18 years.
- PPL is a solid and steady utility company that should be able to navigate the uncertainty in its largest market which is the U.K.
- PPL is also roughly fairly valued, trading at a discount to fair value of 4.2%.
- PPL offers the potential to deliver 10-11% returns over the next 5 years, between the 5.1% yield, the likely 4-5% earnings growth, and the 0.9% multiple expansion.
As a dividend growth investor, it's important for me to invest throughout most sectors of the economy. This diversification is especially important because it allows my portfolio to continue to increase dividend payouts year after year, regardless of economic conditions.
One such industry that is durable enough to withstand the ebb and flow of the global economy is the utility industry. Quite simply, in the technologically dependent economy that we live in, it's important that utilities are able to meet a modern society's energy demands.
There's something to be said of investing in goods and services that provide value to society, and that aren't reliant on the global economy to spur demand for those goods and services.
It is this overarching thesis that has led me to believe an investment in PPL Corporation (PPL) will do well in the years ahead.
