NRG Energy Inc's Dividend Analysis
An In-depth Look at NRG Energy Inc's Dividend Performance and Sustainability
NRG Energy Inc(NYSE:NRG) recently announced a dividend of $0.38 per share, payable on 2023-11-15, with the ex-dividend date set for 2023-10-31. 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 delve into NRG Energy Inc's dividend performance and assess its sustainability.
About NRG Energy Inc
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NRG Energy is one of the largest retail energy providers in the U.S., serving 5.5 million customers. Its 2023 acquisition of Vivint Smart Home added 1.9 million home services customers. NRG also is one of the largest U.S. independent power producers, with 13 gigawatts of coal, gas, and oil power generation capacity primarily in Texas. NRG exited Chapter 11 bankruptcy as a stand-alone entity in December 2003.
A Glimpse at NRG Energy Inc's Dividend History
NRG Energy Inc has maintained a consistent dividend payment record since 2012, with dividends currently distributed on a quarterly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Breaking Down NRG Energy Inc's Dividend Yield and Growth
As of today, NRG Energy Inc currently has a 12-month trailing dividend yield of 3.56% and a 12-month forward dividend yield of 3.62%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, NRG Energy Inc's annual dividend growth rate was 126.80%. Extended to a five-year horizon, this rate decreased to 86.10% per year. And over the past decade, NRG Energy Inc's annual dividends per share growth rate stands at an impressive 12.60%.
Based on NRG Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of NRG Energy Inc stock as of today is approximately 79.47%.
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 2023-06-30, NRG Energy Inc's dividend payout ratio is 0.00.
NRG Energy Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks NRG Energy Inc's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 6 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. NRG Energy Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and NRG Energy Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. NRG Energy Inc's revenue has increased by approximately 53.20% per year on average, a rate that outperforms approximately 87.57% 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, NRG Energy Inc's earnings increased by approximately -30.80% per year on average, a rate that outperforms approximately 15.1% of global competitors.
Conclusion
Considering NRG Energy Inc's consistent dividend payments, impressive growth rate, low payout ratio, fair profitability, and robust growth metrics, it appears to be a promising option for investors seeking regular income. However, it's essential to keep an eye on the company's future performance and industry trends to ensure the sustainability of these dividends. 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.
