COST - Terna: Dividend Growth Energizes Investor Portfolios

2024-04-13 10:51:05 ET

Summary

• Terna Spa is an energy company that plays a crucial role in power grids and facilitates the transition to sustainable energy sources.
• Terna's core business includes the transmission of electricity and the dispatching of electricity, contributing to grid stability and minimizing disruptions.
• Terna has been a reliable dividen payer and promises consistent returns.

Introduction

Infrastructure plays are more and more part of the few key ideas I am building my portfolio. The property of key assets that are essential for an economy is a way to benefit from the overall economic activity of a certain area. Often, infrastructure businesses have a moat due to high barriers to entry and the regulatory environment. Moreover, they often benefit from long-term contracts, economies of scale and they often develop technological expertise hard to replicate. On the other hand, these businesses are capital-intensive carry high amounts of debt, and present an operating risk. These factors may impact the overall returns and may lead many investors to stay out of these plays....

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