Portland General Electric Company (NYSE:POR) has pleased shareholders over the past 10 years, by paying out dividends. The company currently pays out a dividend yield of 3.0% to shareholders, making it a relatively attractive dividend stock. Does Portland General Electric tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
- Is it the top 25% annual dividend yield payer?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- 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 Portland General Electric pass our checks?
The current trailing twelve-month payout ratio for the stock is 61%, which means that the dividend is covered by earnings. Going forward, analysts expect POR’s payout to remain around the same level at 62% of its earnings, which leads to a dividend yield of 3.2%. Furthermore, EPS should increase to $2.43.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
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. POR has increased its DPS from $0.98 to $1.45 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
Relative to peers, Portland General Electric has a yield of 3.0%, which is on the low-side for Electric Utilities stocks.
Considering the dividend attributes we analyzed above, Portland General Electric is definitely worth keeping an eye on for someone 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 essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for POR’s future growth? Take a look at our free research report of analyst consensus for POR’s outlook.
- Valuation: What is POR 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 POR 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 past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.