AES Share Price Down 48% Over Past Three Years

AES Corporation (NYSE:AES) shareholders have seen a 48% decline in the past three years, underperforming the market's 57% return. The company became profitable within the last five years but has seen flat revenue growth. The dividend seems healthy, but the share price drop may be due to other factors. Investors should consider the total shareholder return, which takes into account the value of cash dividends and discounted capital raisings.

AES Corporation (NYSE:AES) shareholders have experienced a significant decline in stock performance over the past three years, with a 48% drop, which underperformed the broader market's 57% return. Despite this, the company has managed to become profitable within the last five years and has maintained a healthy dividend.

In 2024, AES Corporation reported a revenue of $12.28 billion, a decrease of 3.08% compared to the previous year, but earnings were $1.68 billion, representing a substantial increase of 574.30% [1]. The company's dividend has remained strong, with a quarterly dividend of $0.17595 per share, reflecting a yield of 5.5% [2]. The payout ratio is 49.3%, indicating a sustainable dividend policy.

Analysts have mixed opinions on AES's stock. The average rating is "Hold," with a 12-month stock price target of $13.29, a slight decrease from the latest price [1]. Some analysts view AES as a speculative buy due to deep value, improving margins, and strong renewables/data center tailwinds, despite high debt risks [3]. Others see it as a compelling buy at 6x forward earnings, offering a 5.4% well-covered dividend yield and significant upside potential [4].

The recent share price drop may be attributed to various factors. Mitsubishi UFJ Asset Management Co. Ltd. reduced its stake in AES by 33.8%, selling 354,182 shares [2]. Additionally, the company's debt appears high, but 2025 guidance and long-term targets remain on track, with the Renewables SBU Adjusted EBITDA growing by 56% in the second quarter of 2025 [5].

Investors should consider the total shareholder return, which includes the value of cash dividends and discounted capital raisings. AES's dividend yield and payout ratio indicate a healthy dividend policy. However, the company's debt and recent stock performance suggest that investors should exercise caution.

References:
[1] https://stockanalysis.com/stocks/aes/
[2] https://www.marketbeat.com/instant-alerts/filing-mitsubishi-ufj-asset-management-co-ltd-sells-354182-shares-of-the-aes-corporation-nyseaes-2025-08-12/
[3] https://seekingalpha.com/article/4388987-aes-still-offers-a-risk-reward-play
[4] https://seekingalpha.com/article/4388987-aes-corp-compelling-buy-at-6x-pe
[5] https://prnewswire.com/news-releases/aes-reports-second-quarter-2025-results-on-track-to-deliver-on-2025-guidance-and-long-term-targets-301175372.html