Yahoo Finance The AES Corp's Dividend Analysis
Insight into The AES Corp's Upcoming Dividend and Historical Payouts
The AES Corp (NYSE:AES) recently announced a dividend of $0.17 per share, payable on 2024-05-15, with the ex-dividend date set for 2024-04-30. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into The AES Corp's dividend performance and assess its sustainability.
What Does The AES Corp Do?
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The AES Corp is a global power company. Its generation portfolio as of year-end 2023 totals over 35 gigawatts, including renewable energy (53%), gas (27%), coal (18%), and oil (2%). AES has majority ownership and operates six electric utilities distributing power to more than 2.5 million customers.
A Glimpse at The AES Corp's Dividend History
The AES Corp has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a quarterly basis. The AES Corp has increased its dividend each year since 2012, earning the title of a dividend achiever, a distinction awarded to companies with at least a 12-year history of consecutive dividend increases.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down The AES Corp's Dividend Yield and Growth
As of today, The AES Corp currently has a 12-month trailing dividend yield of 3.75% and a 12-month forward dividend yield of 3.79%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, The AES Corp's annual dividend growth rate was 5.00%. This rate remained consistent over a five-year horizon. Over the past decade, The AES Corp's annual dividends per share growth rate stands at an impressive 13.20%.
Based on The AES Corp's dividend yield and five-year growth rate, the 5-year yield on cost of The AES Corp stock as of today is approximately 4.79%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, which ensures the availability of funds for future growth and unexpected downturns. As of 2023-12-31, The AES Corp's dividend payout ratio is 0.38.
The AES Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks The AES Corp's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 6 years out of the past 10 years.
Growth Metrics: The Future Outlook
The sustainability of dividends is underpinned by robust growth metrics. The AES Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. The AES Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. The AES Corp's revenue has increased by approximately 7.20% per year on average, a rate that underperforms approximately 57.49% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, which is critical for sustaining dividends in the long run. During the past three years, The AES Corp's earnings increased by approximately 6.90% per year on average, a rate that underperforms approximately 50% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.20%, underperforms approximately 42.09% of global competitors.
Concluding Thoughts on The AES Corp's Dividends
In conclusion, The AES Corp's consistent dividend growth, reasonable payout ratio, and fair profitability and growth metrics paint a picture of a company committed to rewarding its shareholders through dividends. While its growth rates in revenue, EPS, and EBITDA may not lead the industry, they demonstrate a level of stability that is conducive to ongoing dividend payments. Investors seeking income-generating stocks may find The AES Corp's dividend profile attractive, especially considering its history as a dividend achiever. However, as with any investment, it is crucial to consider the broader economic context and the company's strategic position within the energy sector.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find opportunities similar to The AES Corp.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
