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If you are an income investor, then SSE plc (LSE:SSE) should be on your radar. SSE plc produces, generates, distributes, and supplies electricity and gas, as well as other energy-related services in the United Kingdom and Ireland. Over the past 10 years, the UK£12.02B market cap company has been growing its dividend payments, from £0.58 to £0.91. Currently yielding 7.61%, let’s take a closer look at SSE’s dividend profile. See our latest analysis for SSE
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically: It is paying an annual yield above 75% of dividend payers It has paid dividend every year without dramatically reducing payout in the past 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
SSE’s dividend yield stands at 7.61%, which is high for Electric Utilities stocks. But the real reason SSE 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’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of SSE it has increased its DPS from £0.58 to £0.91 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 SSE a true dividend rockstar. SSE has a trailing twelve-month payout ratio of 68.23%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect SSE’s payout to increase to 75.82% of its earnings, which leads to a dividend yield of 8.06%. However, EPS is forecasted to fall to £1.14 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
Next Steps:
With SSE producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a top dividend generator moving forward. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three relevant aspects you should further examine: