Assessing Origin Energy Ltd's Upcoming Dividend and Financial Health
Origin Energy Ltd (OGFGF, Financial) recently announced a dividend of $0.28 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-05. 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 Origin Energy Ltd's dividend performance and assess its sustainability.
What Does Origin Energy Ltd Do?
Origin Energy is a major vertically integrated Australian energy utility. Its energy retailing business is the largest in Australia, with about 4 million customers and a 33% market share. Its portfolio of base-load, intermediate, and peaking electricity plants is one of the largest in the national electricity market, with a capacity of 6,000 megawatts. Origin also operates and owns 27.5% of Australia Pacific LNG, which owns large coal seam gas fields and LNG export facilities in Queensland.
A Glimpse at Origin Energy Ltd's Dividend History
Origin Energy Ltd has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Origin Energy Ltd's Dividend Yield and Growth
As of today, Origin Energy Ltd currently has a 12-month trailing dividend yield of 4.12% and a 12-month forward dividend yield of 6.12%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Origin Energy Ltd's annual dividend growth rate was 3.20%. Based on Origin Energy Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Origin Energy Ltd stock as of today is approximately 4.12%.
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, Origin Energy Ltd's dividend payout ratio is 0.54.
Origin Energy Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Origin Energy Ltd's profitability 5 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 5 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Origin Energy Ltd's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Origin Energy Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Origin Energy Ltd's revenue has increased by approximately 8.80% per year on average, a rate that underperforms than approximately 57.01% 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, Origin Energy Ltd's earnings increased by approximately -9.40% per year on average, a rate that underperforms than approximately 78.6% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -9.90%, which underperforms than approximately 86.73% of global competitors.
Next Steps
In conclusion, while Origin Energy Ltd's upcoming dividend payment is a welcome event for shareholders, a deeper analysis reveals a mixed picture. The company's consistent dividend history and higher forward dividend yield are positive signals. However, the sustainability of these dividends may be a concern given the company's moderate profitability ranking and growth metrics that trail a significant portion of global competitors. Investors should weigh these factors along with the company's payout ratio to determine if Origin Energy Ltd aligns with their investment strategy and risk tolerance. 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.
