Yahoo Finance Ameren Corp's Dividend Analysis
Exploring the Sustainability and Growth of Ameren Corp's Dividends
Ameren Corp (NYSE:AEE) recently announced a dividend of $0.67 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-12. 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 look into Ameren Corp's 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 15 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Ameren Corp's Dividend Yield and Growth
As of today, Ameren Corp currently has a 12-month trailing dividend yield of 3.57% and a 12-month forward dividend yield of 3.73%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Ameren Corp's annual dividend growth rate was 8.00%. Extended to a five-year horizon, this rate decreased to 6.70% per year. And over the past decade, Ameren Corp's annual dividends per share growth rate stands at 4.70%. 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 4.94%.
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 2024-03-31, Ameren Corp's dividend payout ratio is 0.61. 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 2024-03-31, 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 6.90% per year on average, a rate that underperforms than approximately 59.12% 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 6.30% per year on average, a rate that underperforms than approximately 52.55% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.20%, which underperforms than approximately 49.44% of global competitors.
Concluding Thoughts on Ameren Corp's Dividend Prospects
Considering Ameren Corp's consistent dividend growth, robust profitability, and strategic financial management, the company presents a compelling case for dividend investors. While its growth metrics show areas of underperformance relative to some global competitors, its stable financial base and commitment to shareholder returns suggest a reliable investment for those focused on steady income generation. Investors seeking to expand their portfolio with high-dividend yield stocks can further explore using the High Dividend Yield Screener available for GuruFocus Premium users.
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.
