Exelon Corp's Dividend Analysis
Assessing the Sustainability of Exelon Corp's Upcoming Dividend
Exelon Corp (NASDAQ:EXC) recently announced a dividend of $0.36 per share, payable on 2023-12-08, with the ex-dividend date set for 2023-11-14. 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 Exelon Corp's dividend performance and assess its sustainability.
What Does Exelon Corp Do?
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Exelon Corp serves approximately 10 million power and gas customers at its six regulated utilities in Illinois, Pennsylvania, Maryland, New Jersey, Delaware, and Washington, D.C. The company's commitment to delivering reliable energy services positions it as a significant player in the utilities sector.
A Glimpse at Exelon Corp's Dividend History
Exelon Corp has maintained a consistent dividend payment record since 1986, distributing dividends on a quarterly basis. This track record is indicative of the company's financial stability and commitment to shareholder returns.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Exelon Corp's Dividend Yield and Growth
As of today, Exelon Corp currently has a 12-month trailing dividend yield of 3.64% and a 12-month forward dividend yield of 3.70%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Exelon Corp's annual dividend growth rate was -2.40%. Extended to a five-year horizon, this rate increased to 1.50% per year. And over the past decade, Exelon Corp's annual dividends per share growth rate stands at -0.90%.
Based on Exelon Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Exelon Corp stock as of today is approximately 3.92%.
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. As of 2023-09-30, Exelon Corp's dividend payout ratio is 0.66, suggesting a balanced approach to dividend distribution and earnings retention.
Exelon Corp's profitability rank of 6 out of 10, as of 2023-09-30, suggests fair profitability. The company has reported positive net income for each year over the past decade, further solidifying its financial health.
Growth Metrics: The Future Outlook
Exelon Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook, an important factor for sustaining dividends.
Despite a strong revenue model, Exelon Corp's revenue has decreased by approximately -18.20% per year on average, underperforming approximately 96.3% of global competitors. This decline in revenue growth could raise concerns about future dividend sustainability.
The company's 3-year EPS growth rate also shows underperformance, with earnings decreasing by approximately -11.30% per year on average, underperforming approximately 75.11% of global competitors.
Additionally, the 5-year EBITDA growth rate of -5.00% underperforms approximately 77.59% of global competitors, indicating potential challenges ahead.
Next Steps
In conclusion, while Exelon Corp has a solid history of dividend payments and a fair payout ratio, its recent dividend growth rates and profitability metrics present a mixed picture. The declining revenue and earnings growth rates highlight the need for careful evaluation of the company's future dividend sustainability. Investors should consider these factors, along with the company's strategic initiatives and market position, when making investment decisions. For further research on high-dividend yield stocks, GuruFocus Premium users can utilize 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.
