Have you been waiting for Entergy Corporation’s (NYSE:ETR) upcoming dividend of $0.89 per share? Then you only have to wait 3 more days before the stock pays out on 01 December 2017, and starts trading ex-dividend on the 08 November 2017. Is this future income stream a compelling catalyst for dividend investors to think about ETR as an investment today? Let’s take a look at ETR’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for Entergy
5 checks you should use to assess a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is it the top 25% annual dividend yield payer?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has dividend per share amount increased over the past?
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Is it able to pay the current rate of dividends from its earnings?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Entergy fit our criteria?
Entergy has a negative payout ratio, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. In the near future, analysts are predicting a payout ratio of 70.43% leading to a dividend yield of 4.17%.
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 ETR it has increased its DPS from $3 to $3.56 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. These are all positive signs of a great, reliable dividend stock. Compared to its peers, ETR generates a yield of 4.09%, which is high for electric utilities stocks.
What this means for you:
Are you a shareholder? With Entergy 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 robust dividend generator moving forward. However, depending on your current holdings, it may be valuable exploring other dividend stocks to enhance your diversification, or even look at high-growth stocks to complement your steady income stocks. I suggest continuing your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Taking into account the dividend metrics, Entergy ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Whether or not you like ETR as a dividend stock, it’s still worth checking the price tag. Is Entergy overvalued or is it actually a bargain? Check our latest free analysis to find out!
To help readers see pass 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.