Yahoo Finance Is Banca Finnat Euramerica S.p.A. (BIT:BFE) A Smart Choice For Dividend Investors?
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Banca Finnat Euramerica S.p.A. (BIT:BFE) has pleased shareholders over the past 10 years, by paying out dividends. The company currently pays out a dividend yield of 8.8% to shareholders, making it a relatively attractive dividend stock. Should it have a place in your portfolio? Let's take a look at Banca Finnat Euramerica in more detail.
Check out our latest analysis for Banca Finnat Euramerica
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is its annual yield among the top 25% of dividend-paying companies?
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 it have the ability to keep paying its dividends going forward?
Does Banca Finnat Euramerica pass our checks?
The company currently pays out 37% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 50% which, assuming the share price stays the same, leads to a dividend yield of around 2.9%. However, EPS is forecasted to fall to €0.040 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. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. In the case of BFE it has increased its DPS from €0.020 to €0.030 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. These are all positive signs of a great, reliable dividend stock.
Compared to its peers, Banca Finnat Euramerica generates a yield of 8.8%, which is high for Capital Markets stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Banca Finnat Euramerica 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 essential factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for BFE’s future growth? Take a look at our free research report of analyst consensus for BFE’s outlook.
Valuation: What is BFE 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 BFE 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.
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.