Exploring the Sustainability and Growth of Idacorp Inc's Dividends
Idacorp Inc (IDA, Financial) recently announced a dividend of $0.83 per share, payable on 2024-05-30, with the ex-dividend date set for 2024-05-03. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Idacorp Inc's dividend performance and assess its sustainability.
What Does Idacorp Inc Do?
Idacorp Inc is a holding company that, through its subsidiaries, acts as an electric utility engaged in the generation, transmission, distribution, sale, and purchase of electric energy and capacity. To do this, Idacorp owns and operates a portfolio of hydroelectric, coal-fired, gas-fired, and diesel-fired power plants located across the Northwestern United States. The company's hydroelectric and coal-fired plants are responsible for the majority of its total energy production. Idacorp mainly generates revenue from the sale of electricity to retail and wholesale customers. The majority of the company's customers are residential consumers living in the Northwestern United States, while commercial and industrial consumers also represent important revenue streams.
A Glimpse at Idacorp Inc's Dividend History
Idacorp Inc has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Idacorp Inc has increased its dividend each year since 2004. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 20 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Idacorp Inc's Dividend Yield and Growth
As of today, Idacorp Inc currently has a 12-month trailing dividend yield of 3.41% and a 12-month forward dividend yield of 3.49%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Idacorp Inc's annual dividend growth rate was 5.60%. Extended to a five-year horizon, this rate increased to 5.90% per year. And over the past decade, Idacorp Inc's annual dividends per share growth rate stands at 7.20%.
Based on Idacorp Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Idacorp Inc stock as of today is approximately 4.54%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Idacorp Inc's dividend payout ratio is 0.75, which may suggest that the company's dividend may not be sustainable.
Idacorp Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Idacorp Inc's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Idacorp Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Idacorp Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Idacorp Inc's revenue has increased by approximately 9.20% per year on average, a rate that outperforms approximately 53.23% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Idacorp Inc's earnings increased by approximately 1.50% per year on average, a rate that outperforms approximately 36.92% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 2.30%, which outperforms approximately 37.96% of global competitors.
Conclusion
Considering Idacorp Inc's consistent dividend payments, robust dividend growth rate, and strong financial health indicated by its low payout ratio and high profitability rank, the company presents a compelling case for dividend investors. However, investors should continue to monitor the payout ratio and growth metrics to ensure long-term sustainability. For those looking to expand their portfolio with similar stocks, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
