An in-depth look at Xcel Energy Inc's dividend performance, growth, and sustainability
Xcel Energy Inc (XEL, Financial) recently announced a dividend of $0.52 per share, payable on 2023-10-20, with the ex-dividend date set for 2023-09-14. 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 deep dive into Xcel Energy Incs dividend performance and assess its sustainability.
About Xcel Energy Inc
Xcel Energy manages utilities serving 3.7 million electric customers and 2.1 million natural gas customers in eight states. Its utilities are Northern States Power, which serves customers in Minnesota, North Dakota, South Dakota, Wisconsin, and Michigan; Public Service Company of Colorado; and Southwestern Public Service Company, which serves customers in Texas and New Mexico. It is one of the largest renewable energy providers in the U.S. with half of its electricity sales coming from carbon-free energy.
Exploring Xcel Energy Inc's Dividend History
Xcel Energy Inc has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Xcel Energy Inc has increased its dividend each year since 2003. 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.
Understanding Xcel Energy Inc's Dividend Yield and Growth
As of today, Xcel Energy Inc currently has a 12-month trailing dividend yield of 3.51% and a 12-month forward dividend yield of 3.62%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Xcel Energy Inc's annual dividend growth rate was 6.40%. Extended to a five-year horizon, this rate decreased to 6.30% per year. And over the past decade, Xcel Energy Inc's annual dividends per share growth rate stands at 6.20%.
Based on Xcel Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Xcel Energy Inc stock as of today is approximately 4.76%.
Assessing Dividend Sustainability: 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 2023-06-30, Xcel Energy Inc's dividend payout ratio is 0.64.
Xcel Energy Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Xcel Energy Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Examining Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Xcel Energy 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 Xcel Energy Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Xcel Energy Inc's revenue has increased by approximately 8.10% per year on average, a rate that outperforms than approximately 50.83% 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, Xcel Energy Inc's earnings increased by approximately 6.30% per year on average, a rate that outperforms than approximately 52.28% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.80%, which outperforms than approximately 53.87% of global competitors.
Conclusion: A Promising Dividend Profile
Given Xcel Energy Inc's consistent dividend payments, impressive growth rate, sustainable payout ratio, strong profitability, and robust growth metrics, it presents an attractive profile for investors seeking steady dividend income. However, it's essential to keep monitoring these indicators to ensure the company's ability to maintain its dividend performance in the long run.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
