Questar has authorized a 2-for-1 split of the company's common stock and a 2 cents per share increase in the dividend.
The action came Tuesday following the company's annual meeting at which shareholders, on recommendation of the board of directors, voted to authorize an increase in the number of common shares from 75 million, par value $2.50 per share, to 175 million without par value.Prior to the split, Questar had 19.3 million shares outstanding. Each of those will be split into two shares for a total 38.6 million shares outstanding. The company said certificates representing one additional share for each share held will be mailed June 17 to stockholders of record May 31.
The board also raised the common dividend from 49 cents per share to 51 cents (on a pre-split basis) payable June 24 to stockholders of record May 31. It represents a 2-cent hike over the previous quarter and 3 cents more than the same quarter last year.
Dividends on preferred stock of Questar subsidiary Mountain Fuel Supply Co. were also approved. They are $2 per share on the 8 percent series and $2.15625 on the $8.625 series. Payment date for both series is July 1 to holders of record June 7.
A Questar spokesman said the reason for splitting the stock is to put it in a price range that might be "more comfortable" for a larger number of investors.
Questar's stock is currently trading in the $38-$40 range. The split will take it down to $19-$20, which could make it more attractive to a larger number of investors.
It is also possible that the lower price could, eventually, cause investors to perceive the stock as underpriced, thus generating more sales. However, the underlying value of assets of the company remain unchanged, at least in the short term. Max Knudson