Pennon Group Plc (LON:PNN) Is A Real Dividend Rock Star – Here Is Why
Over the past 10 years Pennon Group Plc (LSE:PNN) has grown its dividend payouts from £0.19 to £0.36. With a market cap of £3.05B, Pennon Group pays out 83.88% of its earnings, leading to a 4.95% yield. Let me elaborate on you why the stock stands out for income investors like myself. Check out our latest analysis for Pennon Group
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically: It is paying an annual yield above 75% of dividend payers It has paid dividend every year without dramatically reducing payout in the past Its has increased its dividend per share amount over the past It can afford to pay the current rate of dividends from its earnings It is able to continue to payout at the current rate in the future
High Yield And Dependable
Pennon Group currently yields 4.95%, which is high for Water Utilities stocks. But the real reason Pennon Group stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of 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. PNN has increased its DPS from £0.19 to £0.36 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 PNN a true dividend rockstar. The company currently pays out 83.88% 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 PNN’s payout to remain around the same level at 76.30% of its earnings, which leads to a dividend yield of 5.69%. In addition to this, EPS should increase to £0.47.
Next Steps:
Pennon Group’s strong dividend attributes make it, without a doubt, a stock dividend investors should be considering for their portfolios. However, given 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 pertinent aspects you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for PNN’s future growth? Take a look at our free research report of analyst consensus for PNN’s outlook.
2. Valuation: What is PNN 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 PNN is currently mispriced by the market.
3. Other Dividend Rockstars: Are there strong dividend payers with better 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.
