Does Eni SpA (BIT:ENI) Have A Place In Your Portfolio?

Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Historically, Eni SpA (BIT:ENI) has paid a dividend to shareholders. It currently yields 5.3%. Let’s dig deeper into whether Eni should have a place in your portfolio.

Check out our latest analysis for Eni

5 questions I ask before picking 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 its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has dividend per share risen in the past couple of years?

• Is is able to pay the current rate of dividends from its earnings?

• Will the company be able to keep paying dividend based on the future earnings growth?

BIT:ENI Historical Dividend Yield September 5th 18

How well does Eni fit our criteria?

Eni has a trailing twelve-month payout ratio of 64.3%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect ENI’s payout to remain around the same level at 61.6% of its earnings, which leads to a dividend yield of around 5.3%. Furthermore, EPS should increase to €1.35.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Dividend payments from Eni have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.

Compared to its peers, Eni produces a yield of 5.3%, which is high for Oil and Gas stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Eni as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that 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. There are three key factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for ENI’s future growth? Take a look at our free research report of analyst consensus for ENI’s outlook.

2. Valuation: What is ENI 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 ENI is currently mispriced by the market.

3. 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 editorial-team@simplywallst.com.