Eversource Energy's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance of Eversource Energy (NYSE:ES)
Eversource Energy (NYSE:ES) recently announced a dividend of $0.72 per share, payable on 2024-03-29, with the ex-dividend date set for 2024-03-04. 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 Eversource Energy's dividend performance and assess its sustainability.
What Does Eversource Energy Do?
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Eversource Energy is a diversified holding company with subsidiaries that provide rate-regulated electric, gas, and water distribution service to more than 4 million customers in the Northeast U.S. The company expanded its service territories with acquisitions of NStar (2012), Aquarion (2017), and Columbia Gas (2020). Eversource is exiting its 50% partnership with European utility Orsted to develop 2 gigawatts of offshore wind projects in the Northeast U.S. The company exited most of its unregulated businesses in 2006.
A Glimpse at Eversource Energy's Dividend History
Eversource Energy has maintained a consistent dividend payment record since 1999. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Eversource Energy's Dividend Yield and Growth
As of today, Eversource Energy currently has a 12-month trailing dividend yield of 4.62% and a 12-month forward dividend yield of 4.90%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Eversource Energy's annual dividend growth rate was 16.60%. Extended to a five-year horizon, this rate decreased to 6.90% per year. And over the past decade, Eversource Energy's annual dividends per share growth rate stands at 5.70%.
Based on Eversource Energy's dividend yield and five-year growth rate, the 5-year yield on cost of Eversource Energy stock as of today is approximately 6.45%.
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 2023-12-31, Eversource Energy's dividend payout ratio is 0.62.
Eversource Energy's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Eversource Energy's profitability 7 out of 10 as of 2023-12-31, 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. Eversource Energy's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Eversource Energy's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Eversource Energy's revenue has increased by approximately 9.10% per year on average, a rate that outperforms approximately 54.19% 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, Eversource Energy's earnings increased by approximately 8.00% per year on average, a rate that outperforms approximately 57.14% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.20%, which outperforms approximately 55.06% of global competitors, further bolsters confidence in its financial stability.
Concluding Insights on Eversource Energy's Dividend Outlook
In conclusion, Eversource Energy's upcoming dividend payment, consistent dividend history, and growth rates present a compelling case for investors, especially those with a focus on steady income streams. The company's reasonable payout ratio, combined with strong profitability and growth metrics, suggest that its dividends are sustainable in the foreseeable future. Investors should consider these factors, alongside their own investment strategies and market conditions, when evaluating Eversource Energy as a potential addition to their portfolios. Will Eversource Energy continue to be a reliable source of dividends for value investors? Only time will tell, but the current indicators are promising. For those interested in exploring further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
