Yahoo Finance ZEAL Network SE (ETR:TIM) Should Be In Your Dividend Portfolio, Here’s Why
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Over the past 10 years ZEAL Network SE (ETR:TIM) has grown its dividend payouts from €0.50 to €1. With a market cap of €190m, ZEAL Network pays out 29% of its earnings, leading to a 4.4% yield. Let me elaborate on you why the stock stands out for income investors like myself.
Check out our latest analysis for ZEAL Network
What Is A Dividend Rock Star?
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically:
It is paying an annual yield above 75% of dividend payers
It consistently pays out dividend without missing a payment or significantly cutting payout
Its dividend per share amount has increased over the past
It is able to pay the current rate of dividends from its earnings
It is able to continue to payout at the current rate in the future
High Yield And Dependable
The company’s dividend yield stands at 4.4%, which is on the low-side for Hospitality stocks. But the real reason ZEAL Network stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of TIM it has increased its DPS from €0.50 to €1 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes TIM a true dividend rockstar.
The current trailing twelve-month payout ratio for the stock is 29%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 64% which, assuming the share price stays the same, leads to a dividend yield of around 5.4%. Furthermore, EPS should increase to €3.5. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider 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.
Next Steps:
ZEAL Network’s strong dividend attributes make it, without a doubt, a stock dividend investors should be considering for their portfolios. However, given 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 relevant factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for TIM’s future growth? Take a look at our free research report of analyst consensus for TIM’s outlook.
Valuation: What is TIM 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 TIM is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better 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.
