AY - Atlantica Sustainable: Big Dividends Compensate For Risks (Rating Upgrade)
2024-05-04 11:12:32 ET
Summary
- Atlantica Sustainable Infrastructure's stock price fall has arrested YTD, with support from its full year 2024 outlook and recent acquisitions.
- The guidance indicates that its already healthy dividends can continue to rise. There can be risks ahead, but even taking them into account, the dividend yield still looks strong.
- The stock's P/E has risen since I last checked, but remains below the long-term average, adding to its attractiveness.
Since the last time I wrote about renewable energy company Atlantica Sustainable Infrastructure ( AY ), its price is up by 8.8% even as it has barely gone anywhere year-to-date [YTD] (see chart below). Even at that time, the potential for further rise was evident based on:
- Its then big trailing twelve months [TTM] dividend yield of 9.2% and the likelihood of it sustaining a 9%+ yield this year going by its financial forecasts.
- Its TTM price-to-earnings (P/E) ratio of 44.5x was much lower than the stock’s 10-year median P/E of 84.4x.