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Verbund AG's Dividend Analysis

Exploring the Sustainability and Growth of Verbund AG's Dividends

Verbund AG (OEZVY) recently announced a dividend of $0.16 per share, payable on 2024-05-28, with the ex-dividend date set for 2024-05-07. 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 Verbund AG's dividend performance and assess its sustainability.

What Does Verbund AG Do?

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Founded in 1947 through a nationalization act, Verbund is the leading power producer in Austria. The Austrian state owns 51% of its capital. Hydro accounts for more than 90% of the total power output. Hydro power is generated from reservoirs and pumped storage plants in the Austrian Alps, and run-of-river plants in Austria and southern Germany. Total hydro capacity amounts to 8.4 GW. Verbund also owns the Austrian electricity grid through its fully owned subsidiary AP. In 2021, the firm acquired 51% of Gas Connect Austria, a gas transmission and distribution system operator. The group also owns one CCGT and is involved in trading and development of wind and solar capacity.

Verbund AG's Dividend Analysis
Verbund AG's Dividend Analysis

A Glimpse at Verbund AG's Dividend History

Verbund AG has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Verbund AG's Dividend Analysis
Verbund AG's Dividend Analysis

Breaking Down Verbund AG's Dividend Yield and Growth

As of today, Verbund AG currently has a 12-month trailing dividend yield of 3.35% and a 12-month forward dividend yield of 4.62%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Verbund AG's annual dividend growth rate was 52.40%. Extended to a five-year horizon, this rate decreased to 39.40% per year. And over the past decade, Verbund AG's annual dividends per share growth rate stands at an impressive 13.80%.

Based on Verbund AG's dividend yield and five-year growth rate, the 5-year yield on cost of Verbund AG stock as of today is approximately 17.63%.

Verbund AG's Dividend Analysis
Verbund AG's Dividend Analysis

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, Verbund AG's dividend payout ratio is 0.40. Verbund AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Verbund AG's profitability 9 out of 10 as of 2023-12-31, 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. Verbund AG's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Verbund AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Verbund AG's revenue has increased by approximately 44.70% per year on average, a rate that outperforms approximately 85.14% 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, Verbund AG's earnings increased by approximately 44.90% per year on average, a rate that outperforms approximately 79.62% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 38.90%, which outperforms approximately 84.88% of global competitors.

Conclusion

With a robust dividend payment record, impressive growth metrics, and strong financial health, Verbund AG stands out as a potentially lucrative opportunity for dividend-seeking investors. The company's future dividend prospects look promising, supported by its strategic investments in renewable energy and consistent financial performance. For investors looking to enhance their portfolio with high-yield opportunities, Verbund AG offers a compelling case. 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.