Insight into Evergy Inc's Upcoming Dividend and Historical Performance
Evergy Inc(EVRG, Financial) recently announced a dividend of $0.64 per share, payable on 2024-03-22, with the ex-dividend date set for 2024-03-08. 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 Evergy Inc's dividend performance and assess its sustainability.
What Does Evergy Inc Do?
Evergy is a regulated electric utility serving eastern Kansas and western Missouri. Major operating subsidiaries include Evergy Metro, Evergy Kansas Central, Evergy Missouri West, and Evergy Transmission Co. The utility has a combined rate base of approximately $19 billion, about half in Kansas and the rest split between Missouri and federal jurisdiction. Evergy is one of the largest wind energy suppliers in the U.S.
A Glimpse at Evergy Inc's Dividend History
Evergy Inc has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis. Evergy 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 21 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Evergy Inc's Dividend Yield and Growth
As of today, Evergy Inc currently has a 12-month trailing dividend yield of 4.86% and a 12-month forward dividend yield of 5.03%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Evergy Inc's annual dividend growth rate was 6.60%. Extended to a five-year horizon, this rate increased to 7.10% per year. And over the past decade, Evergy Inc's annual dividends per share growth rate stands at 6.60%.
Based on Evergy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Evergy Inc stock as of today is approximately 6.85%.
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, Evergy Inc's dividend payout ratio is 0.70, which may suggest that the company's dividend may not be sustainable.
Evergy Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Evergy Inc's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each 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. Evergy Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Evergy Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Evergy Inc's revenue has increased by approximately 3.40% per year on average, a rate that underperforms approximately 73.1% 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, Evergy Inc's earnings increased by approximately 4.50% per year on average, a rate that underperforms approximately 51.75% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 8.00%, which underperforms approximately 37.29% of global competitors.
Investor Takeaways
In conclusion, Evergy Inc's commitment to paying dividends is evident from its long history of consistent payments and incremental growth. However, the dividend sustainability is a complex balance, factoring in the payout ratio, profitability, and growth metrics. While the current payout ratio and profitability rank indicate a strong financial standing, investors should also consider the company's growth rates in revenue, EPS, and EBITDA, which show mixed performance relative to peers. These factors, combined with industry trends and future prospects, should guide investors in making an informed decision about the attractiveness of Evergy Inc as a dividend investment. Will Evergy Inc continue to be a reliable source of dividends for income-focused portfolios? That remains a question for investors to ponder as they weigh the historical data against future potential.
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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.
