Assessing the Sustainability of TNABF's Dividend Payments
Tenaga Nasional Bhd (TNABF, Financial) recently announced a dividend of $0.28 per share, payable on 2024-04-18, with the ex-dividend date set for 2024-03-28. 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 Tenaga Nasional Bhd's dividend performance and assess its sustainability.
What Does Tenaga Nasional Bhd Do?
Tenaga Nasional Bhd, or TNB, is the largest electric utility company in Malaysia. The company is involved in the generation, transmission, distribution, and sale of electricity. TNB segments its operations into a generation division, a transmission division, and a distribution division. The generation division encompasses the company's portfolio of thermal and hydroelectric power plants located throughout Malaysia. Through its subsidiaries, TNB also engages in other energy-related operations, such as the manufacturing of transformers and the providing of consulting services. The company primarily generates revenue through the sale of electricity in West Malaysia. Its customers are mainly commercial operations, domestic consumers, and large industrial entities.
A Glimpse at Tenaga Nasional Bhd's Dividend History
Tenaga Nasional Bhd has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Tenaga Nasional Bhd's Dividend Yield and Growth
As of today, Tenaga Nasional Bhd currently has a 12-month trailing dividend yield of 3.84% and a 12-month forward dividend yield of 4.68%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Tenaga Nasional Bhd's annual dividend growth rate was -10.50%. Extended to a five-year horizon, this rate increased to -3.20% per year. And over the past decade, Tenaga Nasional Bhd's annual dividends per share growth rate stands at an impressive 29.00%.
Based on Tenaga Nasional Bhd's dividend yield and five-year growth rate, the 5-year yield on cost of Tenaga Nasional Bhd stock as of today is approximately 3.26%.
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 2023-09-30, Tenaga Nasional Bhd's dividend payout ratio is 0.93, which may suggest that the company's dividend may not be sustainable.
Tenaga Nasional Bhd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Tenaga Nasional Bhd's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Tenaga Nasional Bhd'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 Tenaga Nasional Bhd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Tenaga Nasional Bhd's revenue has increased by approximately 12.30% per year on average, a rate that outperforms approximately 65.72% 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, Tenaga Nasional Bhd's earnings increased by approximately -9.40% per year on average, a rate that outperforms approximately 25.75% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -10.70%, which outperforms approximately 15.69% of global competitors.
Next Steps for Investors
In conclusion, while Tenaga Nasional Bhd's recent dividend announcement is a positive signal for income-seeking investors, a deeper dive into the company's dividend history, payout ratio, and growth metrics is essential for assessing the sustainability of future payments. The company's strong profitability and growth ranks indicate a robust financial foundation, but the negative growth rates in dividends and earnings per share over certain periods raise questions about long-term sustainability. Investors should consider these factors in the context of their investment strategy and monitor how Tenaga Nasional Bhd navigates the evolving energy sector. Will TNABF continue to electrify its dividend payouts, or will investors need to brace for potential fluctuations? For those seeking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for more insights.
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.
