Southwest Gas Corp. of Las Vegas says it’s rewarding shareholders with a higher dividend — a payout made possible by the company’s continued strong profits.
Southwest Gas, which provides natural gas to 1.9 million customers in Nevada and parts of California and Arizona, on Tuesday reported a fourth-quarter profit of $55.3 million, or $1.19 per share, up from $45 million, or 98 cents, in the year-ago quarter.
Operating revenue of $517.7 million was up from $468.1 million.
Growth in the company’s customer count, cooler weather and a 2 percent reduction in operating expenses boosted results, the company said.
Southwest Gas said that in 2011, it installed 13,000 new meters for customers, but realized 22,000 net new customers.
"This favorable differential represents the first indication, since the economic downturn began in 2007, that measurable numbers of vacant homes are becoming occupied and having service restored. We are encouraged by this directionally positive development," CEO Jeff Shaw said in a statement.
A day earlier, Shaw announced that the Southwest Gas board of directors had increased the quarterly common stock dividend from 26.5 cents per share to 29.5 cents per share.
That’s an 11 percent increase on an annual basis for the company, which has paid quarterly dividends since going public in 1956 — and has raised the payout for the past six consecutive years.
Asked about the company’s policy of continually boosting dividends as opposed to other uses of the cash, such as paying down debt, Shaw told VEGAS INC last year that the dividend increases were necessary to maintain Southwest Gas’s access to capital at a reasonable cost.
In a statement Monday, Shaw said company officials were pleased with "continued improvement in the stability of our revenues, cash flows and capital structure."
"These factors, combined with the company’s strong operating performance, have positioned us to again increase the dividend," he said. "Dividend increases are necessary to facilitate competitive and reasonable returns for our shareholders. Over time, the board intends to increase the dividend such that our payout ratio approaches our local distribution company peer group average while maintaining our strong credit ratings and our ability to effectively fund future rate base growth. The timing and amount of any increases would be based upon the board’s continual review of our dividend rate in the context of the performance of the company’s two operating segments and their future growth prospects."