Our analysis is based on comparing FirstEnergy Corp. with the following peers – Consolidated Edison, Inc., Public Service Enterprise Group Inc, Exelon Corporation, American Electric Power Company, Inc., PPL Corporation, Dominion Resources, Inc., Southern Company, NextEra Energy, Inc. and NRG Energy, Inc. (ED-US, PEG-US, EXC-US, AEP-US, PPL-US, D-US, SO-US, NEE-US and NRG-US).
FirstEnergy Corp.’s dividend yield is 4.65 percent and its dividend payout is -9.93 percent. This compares to a peer median dividend yield of 3.66 percent and a payout level of 73.22 percent. This relatively higher dividend yield and lower payout ratio makes the company a good candidate for dividend investors looking at this peer group. The downside is the company’s relatively low dividend quality score of 25 out of a possible score of 100.
Dividend Quality Overview
- Over the last twelve months (prior to December 31, 2016), FE-US paid a medium quality dividend, which represents a yield of 4.65% 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 2 were 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.
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Over the last twelve months (prior to December 31, 2016), FE-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 5.52x), investing cash flow (coverage of -5.37x), issuance cash flow (coverage of 0.96x) and twelve-month prior cash (coverage of 0.73x), for a total dividend coverage of 1.65x.
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 Yield (%)||5.27||6.66||3.68||4.52||4.46||4.65|
|Dividend Payout (%)||119.57||234.04||202.82||105.63||-9.93||-9.93|
A complete list of metrics and analysis is available on the company page.
FirstEnergy Corp. operates as a diversified energy company. It engages in the generation, transmission, and distribution of electricity, as well as energy management and other energy-related services through its subsidiaries. It operates through the following segments: Regulated Distribution, Regulated Transmission, and Competitive Energy Services (CES). The Regulated Distribution segment distributes electricity through FirstEnergy’s utility operating companies, serving various customers within Ohio, Pennsylvania, West Virginia, Maryland, New Jersey and New York. The Regulated Transmission segment transmits electricity through transmission facilities owned and operated by FirstEnergy’s utilities and the regulatory assets. The CES segment supplies electricity to end-use customers through retail and wholesale arrangements, including competitive retail sales to customers primarily in Ohio, Pennsylvania, Illinois, Michigan, New Jersey and Maryland, and the provision of partial POLR and default service for some utilities in Ohio, Pennsylvania and Maryland, including the utilities. The company was founded in 1996 and is headquartered in Akron, OH.
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