MCO - Icahn Enterprises: Don't Chase The 24% Yield

2024-05-31 07:32:08 ET

Summary

• Icahn Enterprises stock is legendary for its 24% yield.
• Unfortunately, its dividend has been declining over time, and is on the verge of being cut again.
• The problem is that the company has been paying such a vast percentage of earnings out as dividends that its cash position has dwindled.
• Debt levels have declined, but that was facilitated largely by enormous dilution of 236% over 10 years.
• Book value and earnings per share have been declining while interest expense per share has been rising. I don't see how this turns around.

Icahn Enterprises ( IEP ) is a legend in the world of high yield stocks. Boasting a massive 24% yield, it gets the yield hunters salivating. Although the stock gets a mere hold rating from both Seeking Alpha authors and Seeking Alpha Quant, it is a star on Wall Street, with a consensus ‘buy’ rating and no sell ratings!...

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