A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. Over the past 4 years, Zespól Elektrowni Patnów-Adamów-Konin SA (WSE:ZEP) has returned an average of 7.00% per year to shareholders in terms of dividend yield. Let’s dig deeper into whether Zespól Elektrowni Patnów-Adamów-Konin should have a place in your portfolio. See our latest analysis for Zespól Elektrowni Patnów-Adamów-Konin
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 its annual yield among the top 25% of dividend-paying companies?
- 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 it have the ability to keep paying its dividends going forward?
How well does Zespól Elektrowni Patnów-Adamów-Konin fit our criteria?
Zespól Elektrowni Patnów-Adamów-Konin has a trailing twelve-month payout ratio of 54.05%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect ZEP’s payout to fall to 44.02% of its earnings, which leads to a dividend yield of around 12.22%.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider Zespól Elektrowni Patnów-Adamów-Konin as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Compared to its peers, Zespól Elektrowni Patnów-Adamów-Konin generates a yield of 12.22%, which is high for Electric Utilities stocks.
With this in mind, I definitely rank Zespól Elektrowni Patnów-Adamów-Konin as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that 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 essential factors you should further research:
- Valuation: What is ZEP 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 ZEP 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 Zespól Elektrowni Patnów-Adamów-Konin’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.