Dividend Yield & Payout Ratio
- Quarterly dividend: $0.64 → annualized dividend $0.64 × 4 = $2.56 per share.
- Current share price (closing Aug 22 2025): ≈ $30.00.
- Dividend yield: $2.56 / $30.00 ≈ 8.5 %.
- Recent Q3‑2025 EPS: $3.20 (per the latest earnings release).
- Payout ratio: $2.56 / $3.20 ≈ 80 % of earnings.
Relative to peers & earnings
- The U.S. utility & energy dividend‑paying peers (e.g., NextEra Energy, Duke Energy, Southern Company) typically trade at 5‑6 % yield with payout ratios around 60‑70 %.
- NRIM’s 8.5 % yield is well above the sector average, and its 80 % payout sits at the high‑end of the peer range, indicating a more aggressive distribution policy.
- The payout is comfortably covered by the current earnings run‑rate, but the margin is thin; a modest earnings dip (≈ 5 % drop) would push the payout toward 90 %, raising sustainability concerns.
Trading implications
- Bullish bias: The high yield is attractive for income‑focused investors, especially in a low‑rate environment, and the current earnings support the payout. If the market under‑prices the dividend’s sustainability, the stock could see upside pressure as the dividend‑yield premium draws buyers.
- Bearish bias: The elevated payout relative to peers suggests limited headroom for earnings volatility. Any earnings shortfall or capital‑expenditure surge could force a dividend cut, prompting a price correction.
- Actionable view: Consider a light‑to‑moderate long position with a stop‑loss around 10 % below the entry price to protect against a potential dividend‑cut scenario. If the price approaches the $28‑$29 range (≈ 5‑6 % yield) and earnings show signs of weakening, a partial profit‑take or defensive hedge may be prudent.