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Eni: 10% Yield With Even Higher Shareholder Returns On The Horizon

May 02, 2022 7:57 AM ETEni S.p.A. (E) Stock14 Comments
DT Analysis profile picture
DT Analysis


  • Only roughly one year after reducing their dividends during the now infamously severe downturn of 2020, Eni had already had them completely reinstated.
  • Whilst the prospects for further growth were minimal, fast forward to now and their new revised shareholder returns policy accounts for these very strong oil prices.
  • When assessing their guidance, it points towards a very high shareholder yield of circa 10% but more importantly, they would still retain a significant portion of free cash flow.
  • This should see their already healthy financial position deleveraged and thus looking further ahead, they are very likely to once again revise their shareholder returns policy.
  • Since this would see relatively higher shareholder returns for the prevailing oil price, it should be no surprise that I believe maintaining my buy rating is appropriate.

Oil Prices Moving Up

sefa ozel/iStock via Getty Images


After reducing their dividends throughout the severe Covid-19 inspired downturn of 2020, one year later Eni (NYSE:E) had already completely reinstated their former dividends but disappointingly, at the time there were no reasons

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DT Analysis profile picture
I am no longer active, as I am taking a hiatus from finance to pursue business ventures in other sectors.  I hope that my analysis was helpful to investors across the years, thank you.

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Comments (14)

7422981 profile picture
Been waiting on this to trigger a buy signal, today's pullback was a good entry $24.14. A horrible laggard, but seems very undervalued considering refining capability and where it is located.
Limestone Cowboy profile picture
They are going to make a fortune off of Algeria as Europe trades Russia for North Africa as the lesser of two evils. They are among the longest standing operator in the country, full of gas with no market, with a direct pipeline link into Sicily. With the geopolitical rumble going on with Spain and Morocco, this is now the prime avenue for them to take.

Fun fact: Look up the history of how Enrico Mattei, the original CEO of ENI, is almost entirely responsible for Algeria's independence from France.
7422981 profile picture
@Limestone Cowboy Libya issues are weighing on this stock once more, but it's providing a good entry.
gman1253 profile picture
In the future it would be worthwhile to include the withholding tax on dividends for USA citizens of foreign firms. I may be wrong but the tax maybe 19% on divvys. Yes you can get it back via the foreign tax credit but NOT if held in IRAs.
Paperone75 profile picture
@gman1253 in Italy the withholding tax is 26%
Paperone75 profile picture
Great analysis, I'm very long on E
Lbastie64 profile picture
I am very long as well. Eni can go easily to 18€ this year. If not still an amazing and sustained yield
thanks for the article. I recommended eni a few months ago and I bought another batch of stocks last Friday.

I would like to add that Eni is in pole position to sign contracts for increasing oil and natural gas estraction and transport from Africa. the Italian minister of foreign affairs is travelling back and forth across Africa these days.

Europe needs to diversify its supply chain. forget the East. so you need US, Canada and.... Africa.

there is another strong point for the American investor (I live in the Netherlands and I am from Italy, and this does not apply to me) : the euro currency is very low against the dollar. when the tide of the euro rises, a higher evaluation for eni in dollars will come for free.
axisofadvance profile picture
@Lorenzo Marchetti Curious if your outlook has changed since you wrote this comment? The sector as a whole has taken a beating over the past month and Eni was no exception.

While E remains attractive, if the narrative over the next month turns dovish and indicates that inflation has peaked, commodities may continue to draw down in favor of large cap tech which has already been beaten down plenty.

Upcoming earnings and the next FOMC will be telling.

Ti ringrazio in anticipo per la condivisione dei tuoi pensieri.
@axisofadvance hi, I still think eni is very well positioned. the latest movements are merely speculative. france is shutting down their nuclear plants for emergency maintenance, Germany is in deep crisis,... eni is reinforcing its presence in Africa and in the Mediterranean area.
Bultaco-13 profile picture
@Lorenzo Marchetti What do you make of the recent strength of the dollar vs. the euro and how that effects Eni? I’m an American investor by the way.
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