Terna - Rete Elettrica Nazionale Società per Azioni (BIT:TRN) Has Affirmed Its Dividend Of €0.1061

Terna - Rete Elettrica Nazionale Società per Azioni's (BIT:TRN) investors are due to receive a payment of €0.1061 per share on 23rd of November. Based on this payment, the dividend yield will be 4.1%, which is fairly typical for the industry.

Check out the opportunities and risks within the XX Electric Utilities industry.

Terna - Rete Elettrica Nazionale Società per Azioni's Dividend Is Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Terna - Rete Elettrica Nazionale Società per Azioni is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.

The next year is set to see EPS grow by 18.6%. If the dividend continues on this path, the payout ratio could be 66% by next year, which we think can be pretty sustainable going forward.

Terna - Rete Elettrica Nazionale Società per Azioni Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of €0.21 in 2012 to the most recent total annual payment of €0.291. This works out to be a compound annual growth rate (CAGR) of approximately 3.3% a year over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend's Growth Prospects Are Limited

The company's investors will be pleased to have been receiving dividend income for some time. While growth may be thin on the ground, Terna - Rete Elettrica Nazionale Società per Azioni could always pay out a higher proportion of earnings to increase shareholder returns.

Our Thoughts On Terna - Rete Elettrica Nazionale Società per Azioni's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Terna - Rete Elettrica Nazionale Società per Azioni's payments, as there could be some issues with sustaining them into the future. While Terna - Rete Elettrica Nazionale Società per Azioni is earning enough to cover the payments, the cash flows are lacking. We would probably look elsewhere for an income investment.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. To that end, Terna - Rete Elettrica Nazionale Società per Azioni has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about. Is Terna - Rete Elettrica Nazionale Società per Azioni not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.