Banca Generali S.p.A. (BIT:BGN) Is An Attractive Dividend Stock, Here’s Why
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Banca Generali S.p.A. (BIT:BGN) has pleased shareholders over the past 10 years, by paying out dividends. The company currently pays out a dividend yield of 5.7% to shareholders, making it a relatively attractive dividend stock. Should it have a place in your portfolio? Let’s take a look at Banca Generali in more detail.
Check out our latest analysis for Banca Generali
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
Is their annual yield among the top 25% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share risen in the past couple of years?
Is its earnings sufficient to payout dividend at the current rate?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does Banca Generali fit our criteria?
The current trailing twelve-month payout ratio for the stock is 80%, which means that the dividend is covered by earnings. Going forward, analysts expect BGN’s payout to remain around the same level at 78% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 6.4%. Moreover, EPS should increase to €1.69.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. BGN has increased its DPS from €0.060 to €1.25 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.
In terms of its peers, Banca Generali generates a yield of 5.7%, which is on the low-side for Capital Markets stocks.
Next Steps:
With this in mind, I definitely rank Banca Generali as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three important factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for BGN’s future growth? Take a look at our free research report of analyst consensus for BGN’s outlook.
Valuation: What is BGN 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 BGN 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.
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.
