Manila Electric Co's Dividend Analysis
Understanding the Dividend Prospects of Manila Electric Co
Manila Electric Co (MAEOY) recently announced a dividend of $0.4 per share, payable on 2024-05-09, with the ex-dividend date set for 2024-03-26. 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 Manila Electric Co's dividend performance and assess its sustainability.
What Does Manila Electric Co Do?
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Manila Electric Co, or Meralco, is an electric utility company serving the Philippines. Meralco generates, transmits, and distributes electricity through its portfolio of thermal power plants. The vast majority of the energy produced by the company comes from its natural gas and coal facilities. Meralco generates almost all of its revenue through the sale of electricity. While nearly all of the company's customers are residential entities, total energy sales are split fairly evenly between commercial, industrial, and residential customers. Meralco is the largest electric distribution company in the Philippines and serves dozens of cities and municipalities, including Metropolitan Manila.
A Glimpse at Manila Electric Co's Dividend History
Manila Electric Co has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Manila Electric Co's Dividend Yield and Growth
As of today, Manila Electric Co currently has a 12-month trailing dividend yield of 5.14% and a 12-month forward dividend yield of 5.17%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Manila Electric Co's annual dividend growth rate was 25.90%. Extended to a five-year horizon, this rate decreased to 15.80% per year. And over the past decade, Manila Electric Co's annual dividends per share growth rate stands at an impressive 10.70%.
Based on Manila Electric Co's dividend yield and five-year growth rate, the 5-year yield on cost of Manila Electric Co stock as of today is approximately 10.70%.
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, Manila Electric Co's dividend payout ratio is 0.57.
Manila Electric Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Manila Electric Co's profitability 8 out of 10 as of 2023-12-31, suggesting 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
To ensure the sustainability of dividends, a company must have robust growth metrics. Manila Electric Co'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 Manila Electric Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Manila Electric Co's revenue has increased by approximately 17.20% per year on average, a rate that outperforms approximately 77.85% 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, Manila Electric Co's earnings increased by approximately 32.60% per year on average, a rate that outperforms approximately 84.63% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.40%, which outperforms approximately 68.61% of global competitors.
Next Steps
In conclusion, Manila Electric Co's robust dividend history, combined with a healthy payout ratio and strong profitability, positions it as an attractive option for value investors focused on income generation. The company's impressive growth metrics further solidify its ability to sustain and possibly increase its dividend payments in the future. Investors considering Manila Electric Co for its dividend prospects should take note of its dividend growth rate, payout ratio, profitability, and growth metrics as key indicators of the company's financial health and future performance. With these factors in mind, Manila Electric Co presents itself as a compelling candidate for those seeking to enhance their portfolio with a reliable dividend-paying stock.
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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.
