2G Energy (ETR: 2 GB) will pay a dividend of € 0.45
The advice of 2G Energy AG (ETR: 2GB) announced the payment of a dividend of € 0.45 per share on June 18. The dividend yield is 0.5% based on this payout, which is a bit low compared to other companies in the industry.
Discover our latest analysis for 2G Energy
2G Energy’s dividend is well covered by earnings
If predictable over a long period of time, even low dividend yields can be attractive. However, prior to this announcement, 2G Energy’s dividend was comfortably covered by cash flow and earnings. As a result, much of what she earned was reinvested in the business.
Next year is expected to see EPS increase by 4.0%. If the dividend continues on this path, the payout ratio could be 17% by next year, which we believe can be quite sustainable going forward.
2G Energy does not have a long payment history
It’s great to see that 2G Energy has been paying a stable dividend for a number of years now, but we want to be a little cautious about whether that will hold true throughout a full economic cycle. The dividend went from € 0.37 in 2012 to the last annual payment of € 0.45. This works out to a compound annual growth rate (CAGR) of about 2.2% per year during that time. We like that the dividend hasn’t gone down. However, we are aware that the company does not yet have an overly long dividend payment history, which makes us fearful that we are not relying on its dividend income.
The dividend is expected to increase
Investors in the company will be happy to receive dividends for some time. 2G Energy has seen BPA increase over the past five years, at 34% per year. Profits grew rapidly, and with a low payout ratio, we think the company could turn out to be a great dividend paying stock.
We really like the 2G Energy dividend
In summary, it’s good to see that the dividend remains constant, and we don’t think there is any reason to suspect that this could change in the medium term. The company easily earns enough to cover its dividend payments and it is great to see that those profits are converted into cash flow. All of these factors taken into account, we believe this has strong potential as a dividend-paying stock.
Market movements attest to the high value of a coherent dividend policy compared to a more unpredictable policy. However, there are other things for investors to consider when analyzing the performance of stocks. Profit growth generally bodes well for the future value of corporate dividend payments. See if the 3 2G Energy analysts we follow expect continued growth from our free report on the estimates of the company’s analysts. We have also set up a list of global stocks with a solid dividend.
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