Redeia Corporacion SA's Dividend Analysis
Assessing the Sustainability of Redeia Corporacion SA's Upcoming Dividend
Redeia Corporacion SA (RDEIY) recently announced a dividend of $0.15 per share, payable on 2024-01-22, with the ex-dividend date set for 2024-01-03. 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 Redeia Corporacion SA's dividend performance and assess its sustainability.
What Does Redeia Corporacion SA Do?
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Redeia owns and operates the Spanish electric transmission system. The company has acquired almost all of the nation's power grid, which other owners were forced to sell to it by government decree. Its activities are regulated by the National Energy Commission, which answers to the Spanish legislature. Redeia also operates a small fibre-optics network in Spain and has a growing Latin American infrastructure business. The group significantly increased its exposure to telecommunications by acquiring Spanish communications satellite operator Hispasat from Abertis in 2019.
A Glimpse at Redeia Corporacion SA's Dividend History
Redeia Corporacion SA has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Redeia Corporacion SA's Dividend Yield and Growth
As of today, Redeia Corporacion SA currently has a 12-month trailing dividend yield of 6.59% and a 12-month forward dividend yield of 6.58%. This suggests an expectation of stable dividend payments over the next 12 months.
Over the past three years, Redeia Corporacion SA's annual dividend growth rate was 0.60%. Extended to a five-year horizon, this rate increased to 2.70% per year. And over the past decade, Redeia Corporacion SA's annual dividends per share growth rate stands at 6.60%.
Based on Redeia Corporacion SA's dividend yield and five-year growth rate, the 5-year yield on cost of Redeia Corporacion SA stock as of today is approximately 7.53%.
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, Redeia Corporacion SA's dividend payout ratio is 0.82, which may suggest that the company's dividend could be sustainable given its profitability.
Redeia Corporacion SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Redeia Corporacion SA's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of 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. Redeia Corporacion SA'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 Redeia Corporacion SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Redeia Corporacion SA's revenue has increased by approximately 0.10% per year on average, a rate that underperforms approximately 82.27% 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, Redeia Corporacion SA's earnings increased by approximately -2.60% per year on average, a rate that underperforms approximately 64.68% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -0.60%, which underperforms approximately 67.24% of global competitors, is a concern for long-term dividend sustainability.
Conclusion: Evaluating Redeia Corporacion SA's Dividend Outlook
Considering Redeia Corporacion SA's consistent dividend history, current yield, and the five-year growth rate, the company presents an attractive profile for dividend investors. However, the mixed growth metrics and the payout ratio warrant a closer look to ascertain long-term sustainability. Investors should weigh the company's strong profitability against the slower growth rates and the competitive landscape. With prudent analysis, Redeia Corporacion SA may still offer a valuable addition to a dividend-focused 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.
