Yahoo Finance Enel SpA (BIT:ENEL): Ex-Dividend Is In 2 Days
Shares of Enel SpA (BIT:ENEL) will begin trading ex-dividend in 2 days. To qualify for the dividend check of €0.14 per share, investors must have owned the shares prior to 21 January 2019, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Enel’s latest financial data to analyse its dividend characteristics.
Check out our latest analysis for Enel
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5 questions to ask before buying a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Is their annual yield among the top 25% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share amount increased over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How well does Enel fit our criteria?
The company currently pays out 32% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect ENEL’s payout to increase to 69% of its earnings. Assuming a constant share price, this equates to a dividend yield of 6.6%. In addition to this, EPS should increase to €0.45. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Not only have dividend payouts from Enel fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends.
In terms of its peers, Enel produces a yield of 5.0%, which is high for Electric Utilities stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Enel as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three essential aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for ENEL’s future growth? Take a look at our free research report of analyst consensus for ENEL’s outlook.
Valuation: What is ENEL 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 ENEL 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
