Enel Chile SA's Dividend Analysis
Delving into Enel Chile SA's Dividend Sustainability and Growth Prospects
Enel Chile SA (NYSE:ENIC) recently announced a dividend of $0.03 per share, payable on a date yet to be announced, with the ex-dividend date set for 2024-01-18. 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 Enel Chile SA's dividend performance and assess its sustainability.
What Does Enel Chile SA Do?
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Enel Chile SA is an electricity utility company, which through its subsidiaries and affiliates is engaged in the generation, transmission and distribution of electricity businesses in Chile. It operates through two segments including Generation Business and Distribution and Network Business. The Generation Business Segment is comprised of a group of electricity companies that own electricity generating plants, whose energy is transmitted and distributed to end customers. The Distribution and Network Reportable Segment is comprised of a group of electricity companies operating under a public utility concession.
A Glimpse at Enel Chile SA's Dividend History
Enel Chile SA has maintained a consistent dividend payment record since 2016. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Enel Chile SA's Dividend Yield and Growth
As of today, Enel Chile SA currently has a 12-month trailing dividend yield of 11.77% and a 12-month forward dividend yield of 12.24%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Enel Chile SA's annual dividend growth rate was -38.30%. Extended to a five-year horizon, this rate increased to -9.40% per year. Based on Enel Chile SA's dividend yield and five-year growth rate, the 5-year yield on cost of Enel Chile SA stock as of today is approximately 7.18%.
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 2023-09-30, Enel Chile SA's dividend payout ratio is 0.27.
Enel Chile SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Enel Chile SA's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Enel Chile SA's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Enel Chile SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Enel Chile SA's revenue has increased by approximately 18.60% per year on average, a rate that outperforms approximately 82.47% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Enel Chile SA's earnings increased by approximately 5.50% per year on average, a rate that outperforms approximately 51.15% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -4.30%, which outperforms approximately 23.65% of global competitors.
Next Steps
In conclusion, Enel Chile SA's upcoming dividend payment, historical consistency in dividends, and attractive yields are significant considerations for investors. However, the dividend sustainability is also backed by a prudent payout ratio and solid profitability rank. The growth metrics, including revenue and earnings growth, further reinforce the company's capacity to maintain and potentially increase its dividends. As value investors contemplate their next move, they should weigh these factors and consider Enel Chile SA's strategic position within the dynamic energy sector. Will Enel Chile SA continue to be a reliable source of dividend income for your portfolio?
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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.
