Drax Group Plc : DRXGY-US: Dividend Analysis : September 22nd, 2017 (record date) : By the numbers : October 10, 2017

Our analysis is based on comparing Drax Group Plc with the following peers – SSE plc Sponsored ADR, Atlantica Yield plc, Enel Americas S.A. Sponsored ADR and National Grid plc Sponsored ADR (SSEZY-US, ABY-US, ENIA-US and NGG-US).

Drax Group Plc’s dividend yield is 1.56 percent and its dividend payout is 4.32 percent. This compares to a peer average dividend yield of 4.56 percent and a payout level of 56.39 percent. This relatively lagging dividend performance could spur some dividend action going forward – except the company’s current dividend quality score of 58 out of a possible score of 100 is only about average.

Dividend Yield
Dividend Quality Score

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 1 was high quality, 1 was medium quality and 3 were low quality.
  • The ending cash balance, with a dividend coverage of 48.11x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to June 30, 2017), DRXGY-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 20.31x), investing cash flow (coverage of -50.63x), issuance cash flow (coverage of 25.79x) and twelve-month prior cash (coverage of 59.73x), for a total dividend coverage of 49.11x.

DRXGY-US’s issuance cash flow includes outflows from net share buybacks (coverage of -0.00x). Thus, the total coverage including share buybacks is 49.11x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

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 History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 4.29 2.31 3.11 5.2 0.78 1.56
Dividend Payout (%) 58.42 153.31 42.74 88.63 5.67 -42.89

A complete list of metrics and analysis is available on the company page.

Company Profile

Drax Group Plc engages in owning and operating coal-fired power station. It operates through the following segments: Generation, Biomass Supply, and Retail. The Generation segment involves in the generation of electricity at Drax Power Station. The Biomass Supply segment offers production of compressed wood pellets at processing facilities. The Retail segment offers supply of power to business customers and wood pellets. The company was founded on September 13, 2005 and is headquartered in Selby, the United Kingdom.


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