The AES Corp's Dividend Analysis
An In-depth Look at The AES Corp's Dividend Performance and Sustainability
The AES Corp(NYSE:AES) recently announced a dividend of $0.17 per share, payable on 2023-11-15, with the ex-dividend date set for 2023-10-31. 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 Corps dividend performance and assess its sustainability.
What Does The AES Corp Do?
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AES is a global power company. Its current generation portfolio as of year-end 2022 consists of over 32 gigawatts of generation including renewable energy (46%), gas (32%), coal (20%), and oil (2%). AES has majority ownership and operates six electric utilities distributing power to 2.6 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. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 11 years.
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 4.45% and a 12-month forward dividend yield of 4.50%. 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%. Extended to a five-year horizon, this rate increased to 5.50% per year. And over the past decade, The AES Corp's annual dividends per share growth rate stands at an impressive 23.30%.
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 5.82%.
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, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, The AES Corp's dividend payout ratio is 0.00.
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 2023-06-30, suggesting fair profitability. The company has reported net profit in 6 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. The AES Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and 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 7.30% per year on average, a rate that underperforms than approximately 51.85% of global competitors.
Conclusion
The AES Corp has a strong history of consistent dividend payments and a promising growth rate. Despite a payout ratio of 0.00, indicating no current distribution of earnings as dividends, the company's impressive profitability and growth metrics suggest a potential for future dividend increases. However, with a revenue growth rate that underperforms more than half of its global competitors, investors should monitor The AES Corp's financial health and industry dynamics closely.
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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.
