How Does IDACORP Inc (NYSE:IDA) Fare As A Dividend Stock?
There is a lot to be liked about IDACORP Inc (NYSE:IDA) as an income stock, over the past 10 years it has returned an average of 3.00% per year. The stock currently pays out a dividend yield of 2.60%, and has a market cap of US$4.57b. Let’s dig deeper into whether IDACORP should have a place in your portfolio. View out our latest analysis for IDACORP
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it paying an annual yield above 75% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
Does IDACORP pass our checks?
IDACORP has a trailing twelve-month payout ratio of 53.31%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect IDA’s payout to increase to 58.79% of its earnings, which leads to a dividend yield of 2.82%. However, EPS is forecasted to fall to $4.25 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. IDA has increased its DPS from $1.2 to $2.36 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes IDA a true dividend rockstar.
Relative to peers, IDACORP generates a yield of 2.60%, which is on the low-side for Electric Utilities stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank IDACORP 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 fundamental aspects you should look at:
Valuation: What is IDA 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 IDA is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on IDACORP’s board and the CEO’s back ground.
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 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.
