Algonquin Power & Utilities Corp (AQN) Dividend Analysis: A Look at Its Sustainability and ...
Understanding Algonquin Power & Utilities Corp's dividend performance and its implications for investors
Algonquin Power & Utilities Corp (NYSE:AQN) recently announced a dividend of $0.11 per share, payable on 2023-10-13, with the ex-dividend date set for 2023-09-27. 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 deep dive into Algonquin Power & Utilities Corps dividend performance and assess its sustainability.
What Does Algonquin Power & Utilities Corp Do?
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Algonquin Power & Utilities Corp, a parent company of Liberty, is a diversified international generation, transmission, and distribution utility with over $16 billion of total assets. Through its two business groups, the Regulated Services Group and the Renewable Energy Group, AQN is committed to providing safe, secure, reliable, cost-effective, and sustainable energy and water solutions through its portfolio of electric generation, transmission, and distribution utility investments to over one million customer connections, largely in the United States and Canada. AQN provides renewable energy through its portfolio of long-term contracted wind, solar, and hydroelectric generating facilities.
A Glimpse at Algonquin Power & Utilities Corp's Dividend History
Algonquin Power & Utilities Corp has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a quarterly basis. Algonquin Power & Utilities 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.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Algonquin Power & Utilities Corp's Dividend Yield and Growth
As of today, Algonquin Power & Utilities Corp currently has a 12-month trailing dividend yield of 8.79% and a 12-month forward dividend yield of 6.54%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Algonquin Power & Utilities Corp's annual dividend growth rate was 10.10%. Extended to a five-year horizon, this rate decreased to 9.60% per year. And over the past decade, Algonquin Power & Utilities Corp's annual dividends per share growth rate stands at an impressive 12.20%.
Based on Algonquin Power & Utilities Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Algonquin Power & Utilities Corp stock as of today is approximately 13.90%.
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, Algonquin Power & Utilities Corp's dividend payout ratio is 0.00.
Algonquin Power & Utilities Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Algonquin Power & Utilities Corp's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Algonquin Power & Utilities 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 Algonquin Power & Utilities Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Algonquin Power & Utilities Corp's revenue has increased by approximately 9.30% per year on average, a rate that underperforms than approximately 53.17% of global competitors.
Next Steps
In conclusion, Algonquin Power & Utilities Corp's consistent dividend payments, impressive growth rate, and fair payout ratio make it a compelling choice for investors seeking steady income. The company's profitability and growth metrics also suggest its dividends are sustainable in the long term. However, investors should also consider the company's future revenue growth prospects and the broader industry trends. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
