In early 2021, Security Web rated Icahn Enterprises (Nasdaq: IEP) an “F” for dividend security. In different phrases, a dividend lower was projected for the funding firm run and majority owned by legendary investor Carl Icahn.
The problem was that Icahn Enterprises had not been worthwhile and Wall Avenue projected that 2021’s internet earnings can be puny. The Security Web mannequin contains analyst estimates in its calculation.
However the analysts had been method off. As an alternative of an $81 million revenue that was the consensus estimate on the time, Icahn Enterprises earned a whopping $11 billion in 2021. This yr, that quantity is forecast to rise to $14 billion earlier than dipping again to $12.1 billion in 2023.
In 2022, Icahn Enterprises will seemingly pay out $2.7 billion in dividends, which is simply 19% of its earnings. Subsequent yr, that determine is forecast to rise to $3.05 billion, giving it a payout ratio of 25%. That’s fairly low and makes me comfy that Icahn Enterprises can simply afford its dividend.
Sturdy Latest Dividend Historical past
Icahn Enterprises has paid buyers $2 per share each quarter since March 2019. It has additionally raised its dividend thrice since 2013.
Previous to that, the corporate diminished the dividend in 2011, however that dividend lower has aged out and has been forgiven by the Security Web algorithm. (The mannequin accounts for dividend cuts solely inside the final 10 years.)
So for the previous decade, the corporate has had a stable dividend-paying observe file. Earnings must be very sturdy this yr. And even when the analysts get it incorrect by half subsequent yr, Icahn Enterprises ought to simply maintain its dividend.
Dividend Security Score: B
When you have a inventory whose dividend security you’d like me to investigate, go away the ticker within the feedback part.
I hope everybody has an important Christmas.
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