Engie: Investing For Growth With A Tasty Dividend Yield

2025-03-01 03:24:54 ET

Summary

• Engie is well-positioned to benefit from its renewable energy capacity growth and energy infrastructure.
• The EU Commission has approved Engie's nuclear deal with the Belgian. This approval fully confirms Engie's de-risking strategy and offers downside protection.
• Beat in DPS (with an 8.5% dividend yield) while investing for growth makes Engie a Buy. The company's valuation is also at a discount compared to its peers.

It proved to be a good call to maintain the Buy rating on Engie ( OTCPK:ENGIY ) ( OTCPK:ENGQF ), as the company's recent performance has validated its strong fundamentals and growth trajectory. With its exposure to low-cost generation activities, the company is well-positioned to benefit from attractive power prices and its renewable energy arm. Since our Q3 2024 comment, Engie's share price has increased by more than 12% (Fig 1). Aside from the group's management plans to develop the business with a focus on energy infrastructure and renewable growth, our buy rating was backed by 1) downside protection from the network division, 2) saving from group structure simplification, and 3) a valuation discount vs peers combined with a supportive capital allocation with a tasty dividend yield....

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