Why Income Investors Should Have De’Longhi S.p.A. (BIT:DLG) In Their Portfolio
If you are an income investor, then De’Longhi S.p.A. (BIT:DLG) should be on your radar. De’Longhi S.p.A., through its subsidiaries, produces and distributes small appliances for food preparation and cooking, domestic cleaning and ironing, and air conditioning. Over the past 10 years, the €3.6b market cap company has been growing its dividend payments, from €0.060 to €1. Currently yielding 4.1%, let’s take a closer look at De’Longhi’s dividend profile.
View our latest analysis for De’Longhi
What Is A Dividend Rock Star?
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically:
Its annual yield is among the top 25% of dividend payers
It has paid dividend every year without dramatically reducing payout in the past
Its dividend per share amount has increased 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
De’Longhi currently yields 4.1%, which is high for Consumer Durables stocks. But the real reason De’Longhi 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.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of DLG it has increased its DPS from €0.060 to €1 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes DLG a true dividend rockstar.
The company currently pays out 84% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect DLG’s payout to remain around the same level at 88% of its earnings. Assuming a constant share price, this equates to a dividend yield of 4.4%. Furthermore, EPS should increase to €1.24.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
Next Steps:
De’Longhi’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, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three pertinent factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for DLG’s future growth? Take a look at our free research report of analyst consensus for DLG’s outlook.
Valuation: What is DLG 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 DLG is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
