FirstEnergy Corp. (FE – Free Report) announced that its board of directors approved a 4.7% increase in the quarterly dividend rate. The revised quarterly dividend will be 44.50 cents, payable June 1, 2025, to its shareholders of record at the close of business on March 9.
The company’s new annualized dividend rate is $1.78 and the current dividend yield is 4.49%, which is better than the S&P 500 composite’s average of 1.57%.
Can FirstEnergy Sustain Dividend Hikes?
FirstEnergy’s efforts to expand its regulated generation mix provided stability to its earnings trajectory. In the last few years, FE witnessed a successful broadening of regulated operations and a complete transition to become a fully-regulated utility company. FirstEnergy is gaining from improving economic conditions and rising demand from commercial and industrial groups compared with last year.
The company’s strategic investment will help it serve six million customers more efficiently. FirstEnergy’s ‘Energize365’ is a multi-year grid evolution platform, focused on enhancing customer experience while maintaining strong affordability position with rates at or below its in-state peers. With planned investments of $28 billion between 2025 and 2029, the company will install advanced equipment and technologies that will strengthen and modernize its transmission and distribution infrastructure.
Strengthening the transmission and renewable generation assets will allow the company to transmit electricity even during adverse weather conditions and provide emission-free electricity to customers. In February 2025, FE announced that JCP&L was upgrading nearly four miles of existing infrastructure in two separate areas with thicker, stronger poles and overhead wires that can safely carry more electricity and provide more resiliency in storms. Installing nearly 0.25 miles of underground cables connecting the two upgrade zones will provide additional flexibility and protection.
These above factors will enable the company to perform steadily and generate additional funds for payment and increase dividends.
Utilities Continue to Reward Shareholders
Domestic-focused, rate-regulated utilities are stable performers, which allows them to reward shareholders through dividend hikes and share buybacks. Other utilities, such as Essential Utilities (WTRG – Free Report) , PPL Corporation (PPL – Free Report) and Atmos Energy Corporation (ATO – Free Report) , have raised dividend rates during 2025.
The current dividend yields of WTRG, PPL and Atmos Energy are 3.33%, 3.12% and 2.31%, respectively.
Price Movement
In the past three months, FE shares have returned 0.3% compared with its industry’s 5% growth.
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FE’s Zacks Rank
FirstEnergy currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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