SSE (SSE), formerly known as Scottish & Southern Energy, has been one of the most dependable dividend-paying shares in the UK utilities sector since it was privatised nearly 30 years ago. It has increased its dividend to shareholders every year since then, but in recent years the company has got itself into a mess. So much so that its days of increasing its dividend every year by at least the rate of inflation are over.
The company’s problems have taken a heavy toll on its share price. Even with a heavy dividend cut expected next year, it is by no means certain that the worst is over for SSE. Political and regulatory threats hover over it, but given the depressed share price it’s not unreasonable to ask whether these have been overdone. It’s also fair to question whether the shares are a classic value trap.