DTE Energy Co. : DTE-US: Dividend Analysis : December 19th, 2016 (record date) : By the numbers : February 6, 2017

Our analysis is based on comparing DTE Energy Co. with the following peers – Xcel Energy Inc., CMS Energy Corporation, Eversource Energy, MGE Energy, Inc., WEC Energy Group Inc, Alliant Energy Corp, NiSource Inc and Ameren Corporation (XEL-US, CMS-US, ES-US, MGEE-US, WEC-US, LNT-US, NI-US and AEE-US).

DTE Energy Co.’s dividend yield is 3.09 percent and its dividend payout is 65.28 percent. This compares to a peer average dividend yield of 3.19 percent and a payout level of 63.43 percent. This combination of a relatively lower dividend yield and a higher payout ratio suggest that the dividend payout might not be sustainable. In addition, the low dividend quality score of 33 out of a possible score of 100, points to unsustainability as well.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to September 30, 2016), DTE-US paid a medium quality dividend, which represents a yield of 2.99% at the current price.
  • 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 is less than the last full year dividend payment and cannot be relied on to cushion any 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 September 30, 2016), DTE-US paid a medium 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 4.22x), investing cash flow (coverage of -4.07x), issuance cash flow (coverage of 0.85x) and twelve-month prior cash (coverage of 0.34x), for a total dividend coverage of 1.27x.

DTE-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.06x). Thus, the total coverage including share buybacks is 1.34x, 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’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.

Dividend History

Item 2011-12-31 2012-12-31 2013-12-31 2014-12-31 2015-12-31 Latest
Dividend Yield (%) 4.22 3.93 3.79 3.07 3.48 3.09
Dividend Payout (%) 55.56 68.03 68.44 52.75 69.93 65.28

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

Company Profile

DTE Energy Co. is a diversified energy company, which is primarily engaged in the business of providing electricity and natural gas sales, distribution and storage services throughout Michigan through its subsidiaries. It operates through the following segments: DTE Electric, DTE Gas and Other. The DTE Electric segment is engaged in the generation, purchase, distribution and sale of electricity to residential, commercial and industrial customers in southeastern Michigan. The DTE Gas segment consists principally of DTE Gas, which is engaged in the purchase, storage, transportation, distribution and sale of natural gas residential, commercial and industrial customers throughout Michigan and the sale of gas storage and transportation capacity. The Other segment is involved in natural gas pipelines, gathering and storage; power and industrial projects; and energy marketing and trading operations. The company was founded in January 1995 and is headquartered in Detroit, MI.

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