Eni SpA's Dividend Analysis
Delving into the Dividend Dynamics of Eni SpA
Eni SpA (NYSE:E) recently announced a dividend of $0.52 per share, payable on 2024-04-08, with the ex-dividend date set for 2024-03-18. 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 Eni SpA's dividend performance and assess its sustainability.
What Does Eni SpA Do?
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Eni SpA is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2022, the company produced 0.8 million barrels of liquids and 4.5 billion cubic feet of natural gas per day. At end-2022, Eni SpA held reserves of 6.6 billion barrels of oil equivalent, 48% of which are liquids. The Italian government owns a 30.1% stake in the company. Eni SpA is placing its renewable and low-carbon business in a separate entity called Plentitude, which it will likely list publicly at some point.
A Glimpse at Eni SpA's Dividend History
Eni SpA has maintained a consistent dividend payment record since 1996. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Eni SpA's Dividend Yield and Growth
As of today, Eni SpA currently has a 12-month trailing dividend yield of 6.20% and a 12-month forward dividend yield of 6.31%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Eni SpA's annual dividend growth rate was 18.30%. Extended to a five-year horizon, this rate decreased to 2.40% per year. And over the past decade, Eni SpA's annual dividends per share growth rate stands at -3.30%.
Based on Eni SpA's dividend yield and five-year growth rate, the 5-year yield on cost of Eni SpA stock as of today is approximately 6.98%.
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 2023-12-31, Eni SpA's dividend payout ratio is 0.51.
Eni SpA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Eni SpA's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Eni SpA's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Eni SpA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Eni SpA's revenue has increased by approximately 31.80% per year on average, a rate that outperforms approximately 79.86% of global competitors.
Investor Considerations for Eni SpA's Dividends
In conclusion, Eni SpA's dividend payments, growth rate, payout ratio, profitability, and growth metrics paint a comprehensive picture for value investors. The consistency in dividend payments coupled with a solid profitability rank and growth prospects indicate that Eni SpA's dividends could be sustainable. However, investors should also consider the fluctuating nature of the oil and gas industry, potential regulatory changes, and the company's strategic shift towards renewable energy. With these factors in mind, value investors may find Eni SpA to be a potential addition to their portfolios for both income and growth. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
