Our analysis is based on comparing NextEra Energy Partners LP with the following peers – Ormat Technologies, Inc., TransAlta Renewables, Inc., 8point3 Energy Partners LP Class A and Pattern Energy Group, Inc. Class A (ORA-US, TRSWF-US, CAFD-US and PEGI-US).
NextEra Energy Partners LP’s dividend yield is 4.03 percent and its dividend payout is 69.30 percent. This compares to a peer average dividend yield of 5.73 percent and a payout level of 27.81 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 Quality Overview
- Over the last twelve months (prior to December 31, 2016), NEP-US paid a medium quality dividend, which represents a yield of 3.90% at the current price.
- Dividends paid during each of the last five years were all of medium 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), NEP-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 1.57x), investing cash flow (coverage of -5.44x), issuance cash flow (coverage of 4.86x) and twelve-month prior cash (coverage of 0.85x), for a total dividend coverage of 1.86x.
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 (%)||N/A||N/A||39.93||53.75||15.1||4.03|
|Dividend Payout (%)||N/A||N/A||117.19||206.34||69.3||69.3|
A complete list of metrics and analysis is available on the company page.
NextEra Energy Partners LP acquires, manages and owns contracted clean energy projects with long-term cash flows. It owns interests in wind and solar projects in North America, as well as natural gas infrastructure assets in Texas. The company was founded on March 6, 2014 and is headquartered in Juno Beach, FL.
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