Our analysis is based on comparing Companhia Paranaense de Energia with the following peers – Centrais Eletricas Brasileiras S.A. – Eletrobras Sponsored ADR Pfd Class B, CPFL Energia S.A. Sponsored ADR, Companhia Energetica de Minas Gerais SA Sponsored ADR Pfd, AES Corporation, EDP-Energias de Portugal SA Sponsored ADR, Edenor SA Sponsored ADR Class B, Enersis Americas S.A. Sponsored ADR, Gerdau S.A. Sponsored ADR Pfd, Petroleo Brasileiro SA Sponsored ADR and Korea Electric Power Corporation Sponsored ADR (EBRBY-US, CPL-US, CIG-US, AES-US, EDPFY-US, EDN-US, ENIA-US, GGB-US, PBR-US and KEP-US).
Companhia Paranaense de Energia’s dividend yield is 2.95 percent and its dividend payout is 9.98 percent. This compares to a peer average dividend yield of 3.58 percent and a payout level of 6.02 percent. This combination of a relatively lower dividend yield and a higher payout ratio suggest that the dividend payout might not be sustainable. Supporting this is the company’s average dividend quality score of 50 out of a possible score of 100, which points to some weakness in being able to sustain the higher payout ratio.
Dividend Quality Overview
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 3 were medium quality and 2 were low quality.
- The ending cash balance, with a dividend coverage of 4.17x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Quadrant label definitions. Hover to know more
Over the last twelve months (prior to June 30, 2016), ELP-US paid a low quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 5.33x), investing cash flow (coverage of -6.53x), issuance cash flow (coverage of 1.79x) and twelve-month prior cash (coverage of 4.66x), for a total dividend coverage of 5.17x.
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||8.96||5.85||16.2||16.83||12.22||2.95|
|Dividend Payout (%)||34.65||32.07||55.15||55.47||25.78||20.28|
A complete list of metrics and analysis is available on the company page.
Companhia Paranaense de Energia engages in the generation, transmission, distribution and sale of electricity. It operates through the following segments: Power Generation and Transmission, Power Distribution and Sales, Telecommunications, Gas, and Holding Company. The Power Generation and Transmission segment involves in the generation of electric energy from hydraulic, wind, and thermal projects, the transport and transformation of the power. The Power Distribution and Sales segment offers distribution and sale of electric energy; the operation and maintenance of the distribution infrastructure. The Telecommunications segment includes telecommunications and general communications services. The Gas segment comprises the public service of piped natural gas distribution. The Holding Company segment includes participation in other companies. The company was founded on October 26, 1954 and is headquartered in Curitiba, Brazil.
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