ENAKF - E.ON: Current Price Unjustified By Expected Dividend

2024-02-18 09:03:51 ET

Summary

• E.ON is a slow-growing company, with most of its income coming from energy networks, which are heavily regulated by governments.
• The current dividend yield offered by the company does not justify the stock price, as you can obtain a similar yield risk-free from money market funds or savings products.
• Significant future investments will only maintain the income at the current levels.
• Future investments put the dividend at risk as the company is borrowing money to pay dividends.

E.ON ( EONGY ) is a slow-growing utility company, with most of its income coming from energy networks that are heavily regulated by governments. The company is considered a stable dividend payer; however, you have to buy it at the right price to achieve a reasonable dividend yield. This is not the case for E.ON at the current price, which does not offer sufficient yield to hold the stock....

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