Yahoo Finance RWE AG's Dividend Analysis
An In-depth Look at RWE AG's Upcoming Dividend and Financial Health
RWE AG (RWEOY) recently announced a dividend of $1.08 per share, payable on 2024-05-20, with the ex-dividend date set for 2024-05-06. 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 RWE AG's dividend performance and assess its sustainability.
What Does RWE AG Do?
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Since the deal with E.On, RWE is refocused on power generation, mostly in Europe. It owns 38 gigawatts of power generation capacity: 28% from lignite and hard coal plants, 37% from gas plants, 40% from renewables including pumped storage and batteries. Besides Germany, RWE's power plants are chiefly located in the United Kingdom, the Netherlands, Turkey, and the United States for many onshore wind farms.
A Glimpse at RWE AG's Dividend History
RWE AG has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down RWE AG's Dividend Yield and Growth
As of today, RWE AG currently has a 12-month trailing dividend yield of 2.73% and a 12-month forward dividend yield of 3.00%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, RWE AG's annual dividend growth rate was 4.00%. Extended to a five-year horizon, this rate increased to 11.30% per year. Based on RWE AG's dividend yield and five-year growth rate, the 5-year yield on cost of RWE AG stock as of today is approximately 4.66%.
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, RWE AG's dividend payout ratio is 0.47.
RWE AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks RWE AG's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 8 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. RWE AG'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 RWE AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. RWE AG's revenue has increased by approximately 21.40% per year on average, a rate that outperforms approximately 83.7% 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, RWE AG's earnings increased by approximately -9.90% per year on average, a rate that outperforms approximately 23.2% of global competitors.
Conclusion
Considering RWE AG's consistent dividend payments, robust dividend growth rate, manageable payout ratio, and solid profitability and growth metrics, the company appears well-positioned to sustain its dividend payouts. This makes RWE AG an attractive option for value investors seeking steady income from dividends. For further exploration of high-dividend yield opportunities, 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.
