Consolidated Edison Inc's Dividend Analysis
Assessing the Sustainability and Growth of ED's Dividends
Consolidated Edison Inc(NYSE:ED) recently announced a dividend of $0.83 per share, payable on 2024-03-15, with the ex-dividend date set for 2024-02-13. 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 Consolidated Edison Inc's dividend performance and assess its sustainability.
What Does Consolidated Edison Inc Do?
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Consolidated Edison Inc is a holding company for Consolidated Edison of New York, or CECONY, and Orange & Rockland, or O&R. These utilities provide steam, natural gas, and electricity to customers in southeastern New Yorkincluding New York Cityand small parts of New Jersey. The two utilities generate nearly all of Con Ed's earnings following the sale of its clean energy business to RWE in early 2023.
A Glimpse at Consolidated Edison Inc's Dividend History
Consolidated Edison Inc has maintained a consistent dividend payment record since 1975, distributing dividends on a quarterly basis.
As a dividend aristocrat, Consolidated Edison Inc has increased its dividend each year for at least the past 49 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Consolidated Edison Inc's Dividend Yield and Growth
Consolidated Edison Inc currently has a 12-month trailing dividend yield of 3.64% and a 12-month forward dividend yield of 3.73%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Consolidated Edison Inc's annual dividend growth rate was 2.20%. Extended to a five-year horizon, this rate increased to 2.80% per year. And over the past decade, Consolidated Edison Inc's annual dividends per share growth rate stands at 2.90%.
Based on Consolidated Edison Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Consolidated Edison Inc stock as of today is approximately 4.17%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Consolidated Edison Inc's dividend payout ratio is currently 0.71, which may suggest concerns about dividend sustainability.
Consolidated Edison Inc's profitability rank, which stands at 7 out of 10, indicates good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
Consolidated Edison Inc's growth rank of 7 out of 10 suggests a good growth trajectory relative to its competitors. However, its 3-year revenue growth rate of approximately 4.90% per year underperforms 65.42% of global competitors.
The company's 3-year EPS growth rate of approximately 6.40% per year also underperforms 45.03% of global competitors, and its 5-year EBITDA growth rate of 2.00% underperforms 59.89% of global competitors.
Concluding Insights on Consolidated Edison Inc's Dividend Outlook
In conclusion, while Consolidated Edison Inc boasts a rich history of dividend payments and is considered a dividend aristocrat, the sustainability of its dividends is questionable due to a high payout ratio. However, its consistent profitability and decent growth rank provide some reassurance. As value investors, it is essential to weigh these factors and monitor the company's ability to maintain its dividend growth against the backdrop of its financial health and industry dynamics. Will Consolidated Edison Inc continue to light up the portfolios of dividend investors? Only time will tell.
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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.
