An Insightful Analysis of NextEra Energy Partners LP's Dividend Performance and Sustainability
NextEra Energy Partners LP (NEP, Financial) recently announced a dividend of $0.87 per share, payable on 2023-11-14, with the ex-dividend date set for 2023-11-03. 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 NextEra Energy Partners LPs dividend performance and assess its sustainability.
Understanding NextEra Energy Partners LP
NextEra Energy Partners LP is formed to acquire, manage and own contracted clean energy projects. It owns interests in wind and solar projects in North America, as well as natural gas infrastructure assets in Texas. The renewable energy projects are fully contracted, use industry technology and are in regions that are favorable for generating energy from the wind and sun. Its natural gas pipelines in the portfolio are all strategically located, serving power producers and municipalities in South Texas, processing plants and producers in the Eagle Ford Shale, and commercial and industrial customers in the Houston area. Renewable energy sales generate maximum revenue for the company.
A Look at NextEra Energy Partners LP's Dividend History
NextEra Energy Partners LP has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Assessing NextEra Energy Partners LP's Dividend Yield and Growth
As of today, NextEra Energy Partners LP currently has a 12-month trailing dividend yield of 11.32% and a 12-month forward dividend yield of 11.61%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, NextEra Energy Partners LP's annual dividend growth rate was 15.00%. Extended to a five-year horizon, this rate decreased to 14.90% per year. Based on NextEra Energy Partners LP's dividend yield and five-year growth rate, the 5-year yield on cost of NextEra Energy Partners LP stock as of today is approximately 22.67%.
Is NextEra Energy Partners LP's Dividend Sustainable?
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, NextEra Energy Partners LP's dividend payout ratio is 2.48. This may suggest that the company's dividend may not be sustainable.
NextEra Energy Partners LP's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks NextEra Energy Partners LP's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 7 years out of past 10 years.
NextEra Energy Partners LP's Growth Metrics and Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. NextEra Energy Partners LP'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 NextEra Energy Partners LP's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. NextEra Energy Partners LP's revenue has increased by approximately -0.60% per year on average, a rate that underperforms approximately 74.59% of global competitors.
Conclusion
In conclusion, while NextEra Energy Partners LP has demonstrated a strong dividend history, its current payout ratio raises questions about the sustainability of future dividends. However, the company's profitability and growth rank suggest a fair outlook. Investors should continue to monitor these metrics closely and make informed decisions accordingly. 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.
