IDACORP (IDA): Evaluating Valuation After Dividend Hike and New Payout Policy

If you’re thinking about what to do next with IDACORP (IDA), the latest announcement is hard to ignore. The company just revealed a higher quarterly dividend and a fresh approach to its payout ratio policy, dialing up its regular cash dividend to $0.88 per share and targeting a 50% to 60% payout of earnings. This move, paired with IDACORP’s long track record of annual dividend increases since 2011, signals an ongoing commitment to putting cash in shareholders’ pockets while giving management more flexibility to invest for future growth.

IDACORP’s shares have quietly put up a solid showing, delivering a 28% total return over the past year and nearly 18% year-to-date, easily outpacing the wider market for utilities. In the past three months alone, the stock gained more than 12%, reinforcing momentum. Beyond the dividend news, the board also announced a coming retirement of long-serving director Judith A. Johansen, highlighting a moment of leadership transition alongside a period of capital investment and steady earnings expansion.

Given the steady upward move in price and management’s signal of confidence, is this a window to pick up IDACORP before income investors rush in, or has the market already priced in future growth?

Most Popular Narrative: 3.7% Undervalued

According to the most widely followed narrative, IDACORP is modestly undervalued, with fair value estimated slightly above its current share price. Analysts see long-term growth prospects outweighing near-term uncertainties.

Massive planned capital investments in transmission lines, energy storage, and generation assets, supported by a constructive regulatory environment and recent rate case filings, are set to expand IDACORP's rate base. This expansion is expected to enhance regulated returns and support long-term earnings growth. Ongoing national and regional focus on clean energy transition and grid modernization, including federally supported incentives, positions IDACORP to successfully grow its asset base, take advantage of tax credits, and enhance earnings stability and net margins through cost recovery.

What is driving this valuation? Dive deep to uncover what underpins expectations for future returns. The narrative projects growth rates and profit assumptions that could surprise even seasoned investors. Curious how those financial forecasts stack up? Explore the numbers behind this fair value call and see what makes this outlook so compelling.

Result: Fair Value of $132.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, some risks remain. Regulatory setbacks or persistent drought conditions could quickly shift the outlook and reduce IDACORP’s earnings momentum.

Find out about the key risks to this IDACORP narrative.

Another View: A Closer Look at Market Comparisons

Not all valuation models tell the same story. When comparing IDACORP’s share price to the average in its industry, the picture changes. Industry metrics suggest the stock could actually be priced on the high side. Which approach really signals true value?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding IDACORP to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own IDACORP Narrative

If you see things differently or want to dig into the data and conclusions on your own terms, you can craft your personal take in just a few minutes. Do it your way

A great starting point for your IDACORP research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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