Shares of Enbridge Income Fund Holdings Inc (TSE:ENF) will begin trading ex-dividend in 2 days. To qualify for the dividend check of CA$0.19 per share, investors must have owned the shares prior to 29 June 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Enbridge Income Fund Holdings’s latest financial data to analyse its dividend attributes. View out our latest analysis for Enbridge Income Fund Holdings
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it paying an annual yield above 75% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has it increased its dividend per share amount over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does Enbridge Income Fund Holdings fare?
The current trailing twelve-month payout ratio for ENF is 139.57%, meaning the dividend is not sufficiently covered by its earnings. Going forward, analysts expect ENF’s payout to reduce to 98.15% of its earnings, which leads to a dividend yield of around 8.25%. In addition to this, EPS is forecasted to fall to CA$1.32 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment moving forward.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Enbridge Income Fund Holdings as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.In terms of its peers, Enbridge Income Fund Holdings produces a yield of 7.68%, which is high for Oil and Gas stocks.
After digging a little deeper into Enbridge Income Fund Holdings’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three fundamental factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for ENF’s future growth? Take a look at our free research report of analyst consensus for ENF’s outlook.
- Valuation: What is ENF worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether ENF is currently mispriced by the market.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.