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The Top 10 S&P 500 Companies with the Lowest Dividend Growth

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Part 12
The Top 10 S&P 500 Companies with the Lowest Dividend Growth PART 12 OF 18

Analyzing NRG Energy, a Low Dividend Grower

Why did NRG’s operating revenues fall in 2015 and 2016?

NRG Energy’s (NRG) operating revenues fell 8.0% and 16.0%, respectively, in 2015 and 2016. Energy revenues, retail revenues, and other revenues drove its fall in 2015, offset by its capacity revenues. In 2016, every segment recorded a fall, offset by other revenues.

Analyzing NRG Energy, a Low Dividend Grower

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Why did NRG’s EPS fall in 2015 and 2016?

NRG Energy’s (NRG) operating costs and expenses rose 28.0% in 2015 before falling 36.0% in 2016. Impairment losses drove the rise in 2015. As a result, its operating income turned negative in 2015 after falling 418.0%. NRG’s operating income stayed in negative territory in 2016 after falling 113.0%, offset by some gains on the sale of assets.

Other expenses decreased 7.0% in 2015 before rising 33.0% in 2016. The rise in 2016 was due to impairment losses on investments. Its interest expenses decreased in 2016 after increasing in 2015.

These factors resulted in a significant fall in its 2016 EPS (earnings per share), leading to negative EPS. Its EPS further fell 89.0% in 2016 and remained in negative territory. The company’s share buybacks further enhanced its EPS numbers.

The WisdomTree US MidCap Dividend ETF (DON) is a dividend ETF with exposure to NRG Energy. It has a PE ratio of 23.6x and a dividend yield of 2.4%. The PowerShares S&P 500 High Dividend Low Volatility Portfolio ETF (SPHD) is a dividend ETF with 20.0% exposure to utilities. It has a PE ratio of 17.3x and a dividend yield of 3.5%.

In the next part of the series, we’ll discuss NRG Energy’s performance in 2017, its dividend, and a comparison with the broad indexes (SPX-INDEX)(SPY)(DJIA-INDEX)(DIA)(COMP-INDEX)(ONEQ).

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