Yahoo Finance Does Hera S.p.A. (BIT:HER) Have A Place In Your Portfolio?
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Hera S.p.A. (BIT:HER) has pleased shareholders over the past 10 years, by paying out dividends. The company currently pays out a dividend yield of 3.1% to shareholders, making it a relatively attractive dividend stock. Let's dig deeper into whether Hera should have a place in your portfolio.
See our latest analysis for Hera
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Does it pay an annual yield higher than 75% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has the amount of dividend per share grown over the past?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
Does Hera pass our checks?
The company currently pays out 52% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 53% which, assuming the share price stays the same, leads to a dividend yield of around 3.3%. Moreover, EPS should increase to €0.20.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. HER has increased its DPS from €0.080 to €0.10 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
In terms of its peers, Hera generates a yield of 3.1%, which is on the low-side for Integrated Utilities stocks.
Next Steps:
With this in mind, I definitely rank Hera as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. I've put together three fundamental factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for HER’s future growth? Take a look at our free research report of analyst consensus for HER’s outlook.
Valuation: What is HER worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether HER is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
