TECO Energy gave shareholders tangible evidence Wednesday of its ongoing recovery: their first dividend increase in five years.
The company raised the quarterly dividend nearly 3 percent, to 19.5 cents per share, from 19 cents. The annual dividend rate goes to 78 cents per share, up 2 cents.
TECO had a 43-year record of increasing dividends, but slashed them by nearly half in 2003 after a disastrous venture into wholesale power markets. Executives declined to boost dividends until they were confident TECO could resume regular increases.
"For the past two years, our focus has been on implementing our ... debt-retirement plans,'' said chief executive Sherrill Hudson. "With all of the debt maturing in 2007 now retired, and more certainty in our future earnings and cash flows, the time is right to reward our shareholders.''
A handful of shareholders at TECO's annual meeting Wednesday complained that the stock hasn't appreciated like other utility stocks. Shares closed Wednesday at $18.38, a 52-week high.
"In 1998, it was $30 per share and now it's 40 percent lower,'' said Richard Reina of Tampa. "The dividend is much lower, and we have some of the same directors who presided over the big swoon.''
The parent of Tampa Electric and People's Gas, TECO Energy pledged to focus on the utility business and sold the last of its out-of-state wholesale power plants last year.
The company has put TECO Transport, an ocean and river bulk cargo shipper, up for sale to pay off $500-million in debt, now scheduled for 2008 through 2010. That would free up cash for investments, including a new Tampa Electric "clean coal'' power plant in Polk County.
"It's a long road, but we've made a lot of progress,'' said Hudson, who came to TECO in 2004.
Steve Huettel can be reached at firstname.lastname@example.org or (813) 226-3384.