Avangrid (NYSE:AGR) Has Announced A Dividend Of $0.44
Avangrid, Inc.'s board of directors (NYSE:AGR) recently declared that they will distribute a dividend on October 2nd, granting investors a sum of $0.44 for each share held. Consequently, the dividend yield stands at an average 5.0%.
Check out our most recent examination for Avangrid.
Avangrid's Earnings Strongly Support Dividend
We appreciate a satisfactory return on dividends, but it is only beneficial to us if the company can sustain the payments. After examining the most recent payment, it appears that the earnings were actually lower than the dividend amount, causing the company to spend more cash than it was generating. Such a significant dividend payout could potentially strain the company's financial stability in the coming times.
In the future, it is expected that the earnings per share will increase by 69.7% within the next year. Assuming that the dividend follows its recent patterns, we anticipate a payout ratio of 72%. This would assure us of the dividend's durability, even though the current levels are relatively high.
Avangrid's Payment History Is Shortened
Avangrid's dividend has remained relatively consistent for a brief period of time, but we will exercise caution until it proves its stability for a few additional years. In 2016, the annual payment was $1.73, while the most recent full-year payment was $1.76. The dividend has only grown by less than 1% per year during this timeframe. We appreciate that the dividend hasn't decreased, but we are mindful that the company hasn't established a lengthy history of dividend payments, which makes us hesitant to solely rely on its dividend income.
Avangrid's Dividend Growth May Face Challenges
Certain investors will eagerly await the opportunity to purchase a portion of the company's stock due to its commendable track record in distributing dividends. The upward growth of earnings per share has been quite sluggish, steadily increasing at a rate of 4.5% annually. Despite the company's moderate profit growth, it is currently allocating a significant portion of its earnings for dividend payouts. Consequently, this leaves limited flexibility for the company to enhance its dividend payments in the foreseeable future.
Is The Dividend Trustworthy?
In general, it's pleasant to observe a regular payout of dividends. However, we believe that in the long run, the present extent of payment might not be maintainable. The payments are quite elevated to be deemed sustainable, and the historical performance isn't the most impressive. If your primary goal is generating income, we don't consider Avangrid to be a fantastic addition to your investment portfolio.
The fluctuations in the market confirm the importance of a reliable dividend strategy in comparison to one that is uncertain. However, it is crucial for investors to take into account various other aspects, besides just dividends, when evaluating a company. As an illustration, we have discovered three red flags for Avangrid that you ought to be mindful of, and two of them are quite worrisome. Perhaps Avangrid may not be the ideal opportunity you were seeking. In that case, why not peruse through our collection of top dividend stocks?
Simplifying Valuation Complexities With Ease
Discover if Avangrid might be over or undervalued by reviewing our extensive analysis, encompassing estimates of fair value, potential risks and warnings, dividend information, insider transactions, and overall financial well-being.
Take a look at the complimentary evaluation
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This blog post from Simply Wall St is quite broad in its scope. We offer insights based on past information and predictions from analysts, using an impartial approach. Our articles are not meant to be taken as financial guidance. This does not serve as a suggestion to purchase or sell any stocks, and it does not consider your specific goals or financial standing. Our goal is to provide you with in-depth analysis that emphasizes long-term results and is guided by fundamental data. Please note that our analysis may not incorporate the most recent company updates that affect stock prices or qualitative information. Simply Wall St does not hold any positions in the stocks mentioned.
