Italian energy company Enel S.p.A. (MIL:ENEL, Financial) issued financial results for fiscal 2018 on March 21.
The company, which is one of the world’s largest energy providers, recorded 26.7% year over year growth in net income to 4.79 billion euros ($5.4 billion) and net ordinary income growth of 9.5% year over year to 4.06 billion euros.
Revenue of 75.67 billion euros grew 1.4% from 2017, driven by higher sales from the renewables business.
The global distributor of electricity and gas also recorded an improvement in earnings before interest, taxes, depreciation and amortization, which increased 3.9% to 16.16 billion euros,Ă‚ and the EBIT, which grew 1.1% to 9.9 billion euros.
In addition, Enel reported higher net financial debt of roughly $41.1 billion, compared to $37.4 billion as of Dec. 31, 2017. This was mainly due to the acquisition of Brazilian company Enel Distribuição São Paulo, the reorganization of the group’s shareholdings of the subsidiary Enel Generación in Chile and other investments made during the period.
The board of directors has proposed a dividend of 0.28 euros per share for the full year. In January, Enel had already paid half of the proposed annual distribution of free cash flow as an interim dividend. The distribution leads to a forward dividend yield of 5.02%, versus the S&P 500 Index's dividend yield of 1.88% as of March 21.
In a statement, CEO and General Manager Francesco Starace commented on the company’s performance.
“These robust full-year results coupled with the achievements registered on the key pillars of the Group’s 2019 to 2021 strategy enable us to confirm our financial objectives for 2019,” he said.Â
Enel is guiding for EBITDA of 16.2 billion euros, a net ordinary income of 4.1 billion euros, a payout ratio of 70%, an implicit dividend of 0.33 euros per common share and a minimum dividend of 0.32 euros per common share.
Shares were down 0.36% at 5.56 euros on the Borsa Italiana in early trading on Friday for a market capitalization of roughly 56.5 billion euros. The stock has climbed approximately 12.2% over the 52 weeks through March 21.
The share price is above the 200, 100 and 50-day simple moving average lines. The 52-week range is 4.22 euros to 5.63 euros.
Wall Street issued an overweight recommendation rating on the stock with an average price target of 5.75 euros per share. This means Enel S.p.A. is expected to outperform either the industry or the overall market over the next year.
Disclosure: I have no positions in any securities mentioned.
Read more here:
