The AES Corporation AES announced that its board of directors has approved a 10% hike in its quarterly common stock dividend, bringing the annualized payout to 44 cents per share. The annual yield on the dividend is 4.9%.
The raised dividend of 11 cents per share, up from the prior payment of 10 cents, will be effective from the first quarter of 2016. The amount will be paid on Feb 16, 2016 to shareholders of record as of Feb 2, 2016. The ex-dividend date is Jan 29, 2016.
This marks the third consecutive annual hike since the company’s first declaration of dividend in 2012.
AES Corp. strives to maintain a flexible liquidity position. Between 2016 and 2018, the company expects to generate $2.6 billion in discretionary cash. This includes a 30% increase in its Parent Free Cash Flow when compared to the 2013–2015 period. As of Sep 30, 2015, the company had cash and cash equivalents of $1,437 million. Apart from utilizing funds on expansion projects, a stable financial position allows the company to execute initiatives like debt prepayment and refinancing, share repurchase programs and dividend payments. In fact, so far in 2015, the company has returned $700 million or roughly 9% of its current market cap to its shareholders.
For 2015, the company expects to generate approximately $1.3 billion of proportional free cash flow, which translates to 90 cents per share. For 2016, AES Corp. expects to generate about $625 million in parent free cash flow, up 20% from the 2015 guidance.
Zacks Rank
AES Corp. currently holds a Zacks Rank #4 (Sell). Some better-ranked stocks in the power sector are Korea Electric Power Corp. KEP, CMS Energy Corp. CMS and Consolidated Edison, Inc. ED. While Korea Electric Power sports a Zacks Rank #1 (Strong Buy), both CMS Energy and Consolidated Edison carry a Zacks Rank #2 (Buy).
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