Utilities company DUET Group (ASX: DUE) has just reported its interim results and there has been a massive improvement with strong performance coming from all its segments.

In summary, the company reported the following:

  • Revenue came in at $809.7 million which was up 31.4% from the same period last year.
  • EBITDA is up 21% to $449.6 million.
  • Net Profit After Tax (exc. significant items) was up by a whopping 420.5% year on year, coming in at $98.9 million.
  • Earnings per share came in at 4.13 cents per share, compared to a 0.06 cents per share loss a year earlier.
  • Full-year dividend of 18 cents has been reaffirmed.

I’m pleased with these results, the first since the Energy Developments Limited (EDL) acquisition was completed, and feel it has put DUET Group in a position to achieve the analysts’ full-year earnings consensus of 9.9 cents per share.

Its shares are now trading at a trailing price-to-earnings ratio of 44. This does make the shares look a little on the expensive side compared to competitor AGL Energy Ltd (ASX: AGL) which trades at 15.2 times earnings, but in line with APA Group (ASX: APA) which is trading at 43 times earnings.

However, the shares do trade at a forward price-to-earnings ratio of 23.6. Which is actually a little lower than the Utilities forward PE average of 24.5. I wouldn’t expect huge share price gains, but just defensive growth in the future. But that doesn’t really matter when you take into account the dividend the company is paying.

Looking at the full-year dividend makes DUET Group a very tempting investment. The shares closed at $2.34 yesterday, meaning the reaffirmed full-year dividend of 18 cents is a yield of 7.7%. Management has laid out its intention to increase the dividend to 18.5 cents next year, and 19 cents the year after. This continues the trend of the company raising its dividend for the last five consecutive years now.

Speaking on the results Chief Executive Officer David Bartholomew said: “We are very pleased with DUET’s strong FY16 interim result. Adjusted EBITDA, which includes the full six month contribution from Energy Developments Limited (EDL), was up 56.2%. Without EDL, Adjusted EBITDA increased 17.6%, demonstrating the strong performance of DUET’s existing regulated businesses and the increased contribution from DDG.”

I believe the EDL acquisition will prove to be a fantastic one for the company, and expect to see earnings continue to grow steadily over the next few years.

As I have mentioned previously when covering DUET Group, the utilities industry is a great industry to be invested in during volatile markets. While these do look to have calmed recently, should the volatility start to pick up again I would expect these shares to be a safe haven that offers some protection against market sell-offs. Ultimately, we will find out what the market thinks of these results today, but I suspect the dividend will be catching the eye of many income investors.

BRAND NEW! Our Top Dividend Stock for 2016

Our resident dividend expert names his Top Dividend Share for 2016. Not only are the shares dirt cheap, the company is trading on a 5.6% fully franked dividend yield. Simply click here to gain access to this comprehensive FREE investment report, including the name of this fast growing ASX dividend share. No credit card required!

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned.