Understanding AGL Energy Ltd's Dividend Prospects
AGL Energy Ltd (AGLXY, Financial) recently announced a dividend of $0.17 per share, payable on 2024-03-29, with the ex-dividend date set for 2024-02-21. 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 AGL Energy Ltd's dividend performance and assess its sustainability.
What Does AGL Energy Ltd Do?
AGL Energy is one of Australia's largest retailers of electricity and gas. It services over 4 million retail electricity and gas accounts in Australia, or about one-third of the market. Profit is dominated by energy generation, underpinned by its low-cost coal-fired generation fleet. Founded in 1837, it is the oldest company on the ASX. Generation capacity comprises a portfolio of renewable, peaking, intermediate, and base-load electricity generation plants.
A Glimpse at AGL Energy Ltd's Dividend History
AGL Energy Ltd has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down AGL Energy Ltd's Dividend Yield and Growth
As of today, AGL Energy Ltd currently has a 12-month trailing dividend yield of 3.40% and a 12-month forward dividend yield of 5.37%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, AGL Energy Ltd's annual dividend growth rate was -45.50%. Extended to a five-year horizon, this rate increased to -28.30% per year. And over the past decade, AGL Energy Ltd's annual dividends per share growth rate stands at -4.00%.
Based on AGL Energy Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of AGL Energy Ltd stock as of today is approximately 0.64%.
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, AGL Energy Ltd's dividend payout ratio is 0.49.
AGL Energy Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks AGL Energy Ltd's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. AGL Energy Ltd's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and AGL Energy Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. AGL Energy Ltd's revenue has increased by approximately 3.40% per year on average, a rate that underperforms approximately 66.3% 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, AGL Energy Ltd's earnings increased by approximately -31.10% per year on average, a rate that underperforms approximately 86.13% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -28.20%, which underperforms approximately 94.27% of global competitors.
Next Steps for Investors
Considering AGL Energy Ltd's dividend payments, growth rate, payout ratio, profitability, and growth metrics, investors should weigh these factors in their decision-making process. While the company has a history of consistent dividend payments, its growth rates and profitability present a mixed picture for its future dividend sustainability. Investors should monitor AGL Energy Ltd's performance closely, especially in the context of the energy sector's evolving landscape. For those seeking to expand their portfolio with dividend-paying 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.
