How Spire’s (SR) $450M Notes Offering and Dividend Hike Have Changed Its Investment Story

• In recent days, Spire Inc. completed a US$450 million fixed-to-floating rate junior subordinated unsecured notes offering due in 2056 and announced a quarterly dividend increase to US$3.30 per share.
• This combined fixed-income issuance and dividend boost reflect the company’s efforts to strengthen its capital base while rewarding shareholders.
• We'll explore how Spire’s large capital raising and dividend hike influence its long-term investment narrative and growth outlook.

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Spire Investment Narrative Recap

To be a shareholder in Spire today, you need to believe that the company’s regulated natural gas operations and recent investments can outpace ongoing industry headwinds, such as electrification and regulatory changes. The recent US$450 million fixed-to-floating note issuance and dividend increase appear to bolster Spire’s financial flexibility and shareholder rewards, but do not materially alter the most important short-term catalyst: successful integration and value creation from the Piedmont Tennessee acquisition. The biggest near-term risk remains potential regulatory lag impacting returns.

Among Spire’s latest announcements, the 5.1 percent annualized common stock dividend increase to US$3.30 per share is most directly relevant to the capital raise. This move reflects confidence in sustaining payouts even as Spire manages higher infrastructure spending and absorbs new assets, which ties into the ongoing catalysts of expanded scale and regulatory-driven revenue growth.

Yet in contrast to the dividend optimism, investors must also consider how...

Read the full narrative on Spire (it's free!)

Spire's outlook anticipates $3.2 billion in revenue and $344.9 million in earnings by 2028. This scenario assumes a 9.4% annual revenue growth rate and an earnings increase of about $74 million from the current earnings of $270.5 million.

Uncover how Spire's forecasts yield a $89.61 fair value, a 3% upside to its current price.

Exploring Other Perspectives

All one of the Simply Wall St Community's fair value estimates for Spire land at US$95.66 per share. Still, regulatory risk tied to cost recovery and infrastructure spending means future views on value and stability could differ, so explore a range of perspectives.

Explore another fair value estimate on Spire - why the stock might be worth just $95.66!

Build Your Own Spire Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Spire research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Spire research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Spire's overall financial health at a glance.

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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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