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How AES’s Dividend Yield Stacks Up with Peers

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Dividend yield

AES (AES) declared a per share dividend of $0.13 on October 12. The ex-dividend date for it is October 31, and the dividend will be paid on November 15. AES is currently trading at a dividend yield of 3.6%, marginally higher than utilities’ (XLU) average yield of 3.4%. AES’s recent dividend was an increase of more than 8% considering its dividends in the comparable period last year. In comparison, the industry average annual dividend growth is ~5%.

AES yld

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Dividend growth

AES increased its dividends per share by 26% compounded annually in the last five years. However, it has a shorter dividend payment history, as it started paying shareholders in 2012.

Regulated utility giants Southern Company (SO) and Duke Energy (DUK) have some of the longest dividend payment histories among utilities. Southern Company has paid equal or increased dividends for 283 consecutive quarters, while Duke Energy has paid dividends to its shareholders for 368 consecutive quarters. Currently, Duke Energy yields 4.7%, while Southern Company yields 5.5%. You can compare top utilities’ dividend profiles in NEE, DUK, SO, and D: Utility Giants’ Dividend Profiles.

Regulated operations generally facilitate stable and predictable earnings, which ultimately bodes well for stable dividends. AES generates a large chunk of its earnings from competitive operations. Thus, its earnings and eventually dividends are less stable. It has operations spread across 16 countries, which also makes its earnings volatile.

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