Over the past 10 years PPL Corporation (NYSE:PPL) has returned an average of 5.00% per year from dividend payouts. The company is currently worth US$19.36B, and now yields roughly 5.82%. Let’s dig deeper into whether PPL should have a place in your portfolio. View our latest analysis for PPL
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it the top 25% annual dividend yield payer?
- Does it consistently pay out dividends without missing a payment or significantly cutting payout?
- Has the amount of dividend per share grown over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does PPL fare?
PPL has a trailing twelve-month payout ratio of 96.15%, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 68.39%, leading to a dividend yield of around 6.00%. Moreover, EPS should increase to $2.33, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of PPL it has increased its DPS from $1.34 to $1.64 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes PPL a true dividend rockstar. Compared to its peers, PPL generates a yield of 5.82%, which is high for Electric Utilities stocks.
Taking into account the dividend metrics, PPL ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three important factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for PPL’s future growth? Take a look at our free research report of analyst consensus for PPL’s outlook.
- Valuation: What is PPL 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 PPL is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.