Endesa SA's Dividend Analysis

GuruFocus Research

Wed, Dec 27, 2023, 3:12 AM 4 min read

Exploring the Sustainability of Endesa SA's Upcoming Dividend

Endesa SA (ELEZY) recently announced a dividend of $0.27 per share, payable on 2024-01-17, with the ex-dividend date set for 2023-12-28. 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 Endesa SAs dividend performance and assess its sustainability.

What Does Endesa SA Do?

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Endesa generates, distributes, and supplies electricity in Spain and Portugal. The company has 22 gigawatts of installed generation capacity split among hydroelectric, nuclear, coal, natural gas, oil, solar, and wind. Endesa also supplies gas to retail and business customers in Spain and France.

A Glimpse at Endesa SA's Dividend History

Endesa SA has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Endesa SA's Dividend Yield and Growth

As of today, Endesa SA currently has a 12-month trailing dividend yield of 8.04% and a 12-month forward dividend yield of 10.56%. This suggests an expectation of increased dividend payments over the next 12 months.

Over the past three years, Endesa SA's annual dividend growth rate was -13.10%. Extended to a five-year horizon, this rate increased to -2.60% per year. And over the past decade, Endesa SA's annual dividends per share growth rate stands at 7.80%.

Based on Endesa SA's dividend yield and five-year growth rate, the 5-year yield on cost of Endesa SA stock as of today is approximately 7.05%.

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 2023-06-30, Endesa SA's dividend payout ratio is 0.67.

Endesa SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Endesa SA'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.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. Endesa SA'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 Endesa SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Endesa SA's revenue has increased by approximately 19.10% per year on average, a rate that outperforms approximately 83.92% 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, Endesa SA's earnings increased by approximately 53.40% per year on average, a rate that outperforms approximately 91.76% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of 20.10%, which outperforms approximately 81.53% of global competitors.

Next Steps

Endesa SA's consistent dividend payments and substantial yield are attractive features for income-focused investors. While past performance indicates fluctuating dividend growth rates, the company's strong profitability and growth metrics provide a positive outlook for future sustainability. The dividend payout ratio suggests a balance between rewarding shareholders and retaining earnings for growth. Considering these factors, Endesa SA appears to be a compelling choice for value investors seeking stable dividend income. As Endesa SA continues to navigate the energy sector's evolving landscape, investors should monitor the company's financial health and market position to ensure ongoing dividend reliability.

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.

This article first appeared on GuruFocus.

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