Yahoo Finance Eaton Corporation plc (NYSE:ETN): Ex-Dividend Is In 4 Days
Important news for shareholders and potential investors in Eaton Corporation plc (NYSE:ETN): The dividend payment of US$0.66 per share will be distributed to shareholders on 16 November 2018, and the stock will begin trading ex-dividend at an earlier date, 01 November 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Eaton’s latest financial data to analyse its dividend characteristics.
See our latest analysis for Eaton
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:
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 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
Eaton currently yields 3.7%, which is high for Electrical stocks. But the real reason Eaton 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 is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. ETN has increased its DPS from $1 to $2.64 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.
The company currently pays out 35% 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 ETN’s payout to increase to 48% of its earnings, which leads to a dividend yield of 3.9%. However, EPS is forecasted to fall to $5.62 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
Next Steps:
Eaton’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 urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three key factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for ETN’s future growth? Take a look at our free research report of analyst consensus for ETN’s outlook.
Valuation: What is ETN 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 ETN 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.
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.
