Our analysis is based on comparing The AES Corp. with the following peers – Dominion Resources, Inc., Duke Energy Corporation, American Electric Power Company, Inc., NRG Energy, Inc., Ormat Technologies, Inc., Sempra Energy, Enel Generacion Chile S.A. Sponsored ADR, SunPower Corporation and Enel Americas S.A. Sponsored ADR (D-US, DUK-US, AEP-US, NRG-US, ORA-US, SRE-US, EOCC-US, SPWR-US and ENIA-US).
The AES Corp.’s dividend yield is 3.93 percent and its dividend payout is -25.58 percent. This compares to a peer median dividend yield of 3.14 percent and a payout level of 55.36 percent. This relatively higher dividend yield and lower payout ratio makes the company a good candidate for dividend investors looking seeking good current dividend income within this peer group. In addition, the company’s relatively good dividend quality score of 92 out of a possible score of 100, underscores its attractiveness for dividend investors.
Dividend Quality Overview
- Over the last twelve months (prior to December 31, 2016), AES-US paid a high quality dividend, which represents a yield of 3.84% 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 4 were high quality and 1 was medium quality.
- The ending cash balance, with a dividend coverage of 8.21x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to December 31, 2016), AES-US paid a high 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 9.94x), investing cash flow (coverage of -7.27x), issuance cash flow (coverage of -1.58x) and twelve-month prior cash (coverage of 7.04x), for a total dividend coverage of 9.21x.
AES-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -0.24x) and net share buybacks (coverage of -0.27x). Thus, the total coverage including share buybacks is 9.48x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||0.38||1.14||1.49||4.33||3.79||3.93|
|Dividend Payout (%)||-3.25||44.99||17.55||90.07||-25.58||-25.58|
A complete list of metrics and analysis is available on the company page.
The AES Corp. operates as a power generation and utility company. It operates through the Generation and Utilities segments. The Generation segment refers to the utilization of fuels and technologies to generate electricity such as coals, gas, hydro, wind, solar and biomass. The Utilities segment comprises the transmission, distribution, and in certain circumstances, generate power. It also operates through the following business units: United States; Chile, Colombia, and Argentina; Brazil; Mexico, Central America and Caribbean; Europe, and Asia. The company was founded by Dennis W. Bakke and Roger W. Sant in 1981 and is headquartered in Arlington, VA.
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