American Electric Power raises dividend, to boost implied yield to over 3.7%

Shares of American Electric Power Co. Inc. AEP, +0.46% rose 0.6% in morning trading Tuesday, after the Ohio-based electricity transmission company said it raised its cash dividend by 5.4%. The new quarterly dividend of 78 cents a share, up from 74 cents, will be payable Dec. 10 to shareholders of record on Nov. 10. At current stock price, the new annual dividend rate implies a dividend yield of 3.74%, which compares with the SPDR Utilities Select Sector ETF's XLU, +0.78% yield of 3.01% and the implied yield for the S&P 500 SPX, +0.64% of 1.34%. American Electric's stock has edged up 0.3% year to date, while the utilities ETF has gained 4.8% and the S&P 500 has rallied 20.2%.