Terna – Rete Elettrica Nazionale Società per Azioni (BIT:TRN) has pleased shareholders over the past 10 years, paying out an average dividend of 6.00% annually. The company currently pays out a dividend yield of 4.94% to shareholders, making it a relatively attractive dividend stock. Let’s dig deeper into whether Terna – Rete Elettrica Nazionale Società per Azioni should have a place in your portfolio. Check out our latest analysis for Terna – Rete Elettrica Nazionale Società per Azioni
5 checks you should use to assess a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it have the ability to keep paying its dividends going forward?
How does Terna – Rete Elettrica Nazionale Società per Azioni fare?
The company currently pays out 64.24% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect TRN’s payout to increase to 73.18% of its earnings, which leads to a dividend yield of around 5.61%. However, EPS is forecasted to fall to €0.34 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.
In terms of its peers, Terna – Rete Elettrica Nazionale Società per Azioni generates a yield of 4.94%, which is high for Electric Utilities stocks.
Keeping in mind the dividend characteristics above, Terna – Rete Elettrica Nazionale Società per Azioni is definitely worth considering for investors looking to build a dedicated income portfolio. 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. There are three key aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for TRN’s future growth? Take a look at our free research report of analyst consensus for TRN’s outlook.
- Valuation: What is TRN 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 TRN is currently mispriced by the market.
- 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.