Enel SpA's Dividend Analysis
In This Article:
Assessing the Sustainability and Growth of Enel SpA's Dividends
Enel SpA (ENLAY) recently announced a dividend of $0.23 per share, payable on 2024-02-14, with the ex-dividend date set for 2024-01-22. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Enel SpA's dividend performance and assess its sustainability.
What Does Enel SpA Do?
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Enel is a diversified energy company domiciled in Italy. Operations are concentrated in Italy, Spain, and Latin America. The firm's primary activities are electric generation, electric networks, and gas and electricity marketing. Around 50% of the company's EBITDA is derived from its regulated networks. Taking into account power sold through power purchase agreements in Latin America, around 70% of EBITDA is quasi-regulated. Enel is a giant in global power generation with 86 gigawatts of capacity, of which 39 GW is renewables, including a large share of hydro.
A Glimpse at Enel SpA's Dividend History
Enel SpA has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a bi-annual basis. Enel SpA has increased its dividend each year since 2014. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 10 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Enel SpA's Dividend Yield and Growth
As of today, Enel SpA currently has a 12-month trailing dividend yield of 6.06% and a 12-month forward dividend yield of 6.40%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Enel SpA's annual dividend growth rate was 10.70%. Extended to a five-year horizon, this rate increased to 15.80% per year. And over the past decade, Enel SpA's annual dividends per share growth rate stands at an impressive 11.90%.
Based on Enel SpA's dividend yield and five-year growth rate, the 5-year yield on cost of Enel SpA stock as of today is approximately 12.62%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Enel SpA's dividend payout ratio is 0.73, which may suggest that the company's dividend may not be sustainable.