Unraveling Ameren Corp's Dividend Performance: A Deep Dive into Sustainability and Growth
Exploring the past, present and future of Ameren Corp's dividend payouts
Ameren Corp(NYSE:AEE) recently announced a dividend of $0.63 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-12. 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 deep dive into Ameren Corps dividend performance and assess its sustainability.
What Does Ameren Corp Do?
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Ameren owns rate-regulated generation, transmission, and distribution networks that deliver electricity and natural gas in Missouri and Illinois. It serves more than 2.4 million electricity customers and more than 900,000 natural gas customers.
A Glimpse at Ameren Corp's Dividend History
Ameren Corp has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis.
Ameren Corp has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years.
Breaking Down Ameren Corp's Dividend Yield and Growth
As of today, Ameren Corp currently has a 12-month trailing dividend yield of 3.08% and a 12-month forward dividend yield of 3.18%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Ameren Corp's annual dividend growth rate was 7.10%. Extended to a five-year horizon, this rate decreased to 5.80% per year. And over the past decade, Ameren Corp's annual dividends per share growth rate stands at 3.90%.
Based on Ameren Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Ameren Corp stock as of today is approximately 4.08%.
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, Ameren Corp's dividend payout ratio is 0.57.
Ameren Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Ameren Corp'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. Ameren Corp'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 Ameren Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Ameren Corp's revenue has increased by approximately 8.60% per year on average, a rate that outperforms than approximately 52.9% 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, Ameren Corp's earnings increased by approximately 7.30% per year on average, a rate that outperforms than approximately 55.05% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 11.40%, which outperforms than approximately 68.36% of global competitors.
Next Steps
Given Ameren Corp's consistent dividend payments, impressive growth rate, sustainable payout ratio, strong profitability, and robust growth metrics, it appears to be a promising investment for those seeking dividend income. However, investors are advised to conduct their thorough research and consider other factors such as market conditions, industry trends, and company fundamentals before making an investment decision.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
