April 28, 2025 a 03:31 am
ED: Dividend Analysis - Consolidated Edison, Inc.
Consolidated Edison, Inc. (ED) has been a stalwart in the utility sector, offering steady dividends over the years. With a current dividend yield of approximately 3.04% and an impressive history of uninterrupted dividend payments for 56 years, it reflects a strong commitment to shareholders. However, investors should note the negative cash flow as an area of concern, potentially impacting future dividend security.
📊 Overview
The following table gives a brief overview of key dividend and sector-specific metrics that define Consolidated Edison, Inc.'s dividend profile.
| Sector | Dividend yield | Current dividend per share | Dividend history | Last cut or suspension |
|---|---|---|---|---|
| Utilities | 3.04% | 3.18 USD | 56 years | None |
🗣️ Dividend History
The consistency of dividend payments is critical for income-focused investors. ED's long history of payment continuity displays financial discipline and reliability, a factor that appeals to dividend-seeking investors.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.70 |
| 2024 | 3.32 |
| 2023 | 3.24 |
| 2022 | 3.16 |
| 2021 | 3.10 |
📈 Dividend Growth
The growth of a company's dividend is a key indicator of financial health and reflects management's confidence in future earnings.
| Time | Growth |
|---|---|
| 3 years | 2.31% |
| 5 years | 2.32% |
The average dividend growth is 2.32% over 5 years. This shows moderate but steady dividend growth, which is appealing for conservative investors.
⚠️ Payout Ratio
The payout ratio is a key measure of dividend sustainability. A lower ratio often indicates a cushion for tougher times, while a higher ratio might flag potential risks.
| Key figure | Ratio |
|---|---|
| EPS-based | 60.44% |
| Free cash flow-based | -98.98% |
A 60.44% EPS payout ratio is quite reasonable, implying that a significant portion of earnings is available for growth or cushioning. However, the negative FCF ratio is a red flag, indicating cash constraints.
✅ Cashflow & Capital Efficiency
Evaluating cash flow and capital efficiency is crucial in understanding a company's financial flexibility and ability to sustain dividend payments.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 10.88% | -7.39% | -0.69% |
| Earnings Yield | 5.90% | 7.96% | 4.91% |
| CAPEX to Operating Cash Flow | 0% | 208.44% | 105.92% |
| Stock-based Compensation to Revenue | 0% | 0% | 0.41% |
| Free Cash Flow / Operating Cash Flow Ratio | 1 | -1.08 | -0.06 |
The negative free cash flow relative to operating cash in past years poses concerns about cash sufficiency and financial prudence despite positive earnings yields.
📈 Balance Sheet & Leverage Analysis
Long-term financial stability and prudent leverage practices are pivotal in ensuring ongoing business success and dividend sustainability.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.02 | 1.18 | 1.18 |
| Debt-to-Assets | 0.02 | 37.70% | 35.35% |
| Debt-to-Capital | 0.02 | 54.17% | 54.13% |
| Net Debt to EBITDA | 0.06 | 3.93 | 4.60 |
| Current Ratio | 0.51 | 1.01 | 1.14 |
| Quick Ratio | 0.51 | 0.94 | 1.10 |
| Financial Leverage | 1.05 | 3.14 | 3.34 |
The slightly elevated leverage metrics and financial ratios suggest a cautious outlook, ensuring liquidity and prudent financial management remain a priority for dividend safety.
✅ Fundamental Strength & Profitability
Profitability ratios provide insights into operational efficiency and indicative competitive positioning, crucial in sustaining dividends.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 8.29% | 11.91% | 8.02% |
| Return on Assets | 7.91% | 3.80% | 2.40% |
| Margins: Net | 11.93% | 17.18% | 10.59% |
| Margins: EBIT | 21.79% | 27.46% | 19.46% |
| Margins: EBITDA | 35.92% | 41.34% | 32.12% |
| Margins: Gross | 82.05% | 50.50% | 49.04% |
| R&D to Revenue | 0% | 0% | 0.17% |
With respectable margins and consistent returns, the company demonstrates operational robustness, aligning with shareholder wealth interests.
📉 Price Development
✅ Dividend Scoring System
This scoring system evaluates key categories crucial to dividend health:
| Category | Evaluation | Score |
|---|---|---|
| Dividend yield | 3.04% | |
| Dividend Stability | 56 Years | |
| Dividend growth | 2.32% 5Y avg | |
| Payout ratio | EPS 60.44% | |
| Financial stability | Moderate Debt | |
| Dividend continuity | None | |
| Cashflow Coverage | Improving | |
| Balance Sheet Quality | Sound |
Overall Score: 36/40
🗣️ Rating
Consolidated Edison, Inc. presents itself as a reliable dividend-paying entity with a storied history of consistency and stability. However, caution is advised due to current cash flow issues. Overall, it merits a "Buy" for conservative investors seeking stable income, provided they acknowledge the potential risks associated with cash flow constraints.