Meridian Energy paid a total dividend of 1,051 million NZD last year, for a market capitalization of 6,741 millions.
Dividend per share of Meridian Energy is 0.41 NZD, and his stock market price 2.63 NZD.
According to the chart, where dividend yield is displayed, Meridian Energy has a dividend yield of 15.57%, which is higher than the amount offered by both the market average and companies from New Zealand. It is also bigger than average of Utilities industry. This high dividend yield might be a sign to worry about the future of the company so deeper analysis is needed.
About the ability of Meridian Energy to maintain his current dividend of NZD 0.41 per share, an amount that accounts for 15.57%, we should study its payout ratio both on earnings and on cash-flows (see chart below). Meridian Energy payout on ernings is currently 512.50%, which is higher than the market average, and companies of Utilities industry, which are 40.24% and 49.39% respectively. Both figures show that Meridian Energy can have problems to keep with his present dividend yield.
The payout on earnings should be complemented with the payout on cash flow since it is this latter amount the one which can be distributed to shareholders. Cash flow per share of Meridian Energy is NZD 0.18 per share, which is lower than the dividend per share paid by the company of NZD 0.41, so the company does not generate enough cash to maintain his dividend in the future.
The following figure shows payout ratios over earnings and cashflow of Meridian Energy, compared againt world market average, New Zealand companies, Utilities industry and Electricity sector companies. You might also need to check full financial report of Meridian Energy.
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