Value investor often look into those 11 creteria when evluating a dividend stock:

Criterion #1: Credit Rating   Look for stocks with a grade of B+ or higher ( Moody’s www.moodys.com and Standard and Poor’s www.standardandpoors.com)

ENIA passed with its Baa3 rating. See the news below:

New York, December 19, 2019 — Moody’s Investors Service (“Moody’s“) today changed to positive from stable the outlook on Enel Américas S.A. (ENIA). Moody’s also affirmed the ‘Baa3‘ senior unsecured rating of ENIA.Dec 19, 2019

Criterion #2: Cash Flow Assessment

A strong cash flow allows a company to scale its operations and develop innovative products. It provides the means to fund dividend payouts . We look for Net Income growing at 5-10% per year (from Income Statement) – we also prefer stable or growing Operating Cash flow (From Cash Flow Statement).

We may use financial data from morningstar.

ENIA:

Net Income:

2017	2018	2019	TTM	3-Yr Trend
0.71	1.20	1.61	1.61	Increase every year

Operating cash flow: ?

Not found in morning star for the last 3 years somehow.

Criterion #3: Cash & Cash Equivalents       

We prefer a company with consistent growth in cash and cash equivalents, as seen from Balance Sheets from financial web sites such as morning star.

ENIA:

2017	2018	2019	Q4 2019
1.58	2.05	2.04	2.04

Criterion #4: Debt Repayment Capacity

We prefer a company with a debt coverage ratio of at least 3:1.

We can use data from morning star.

debt coverage ratio = Net Income / (Interest Expenses + Other Payments)

Other payments could be principle, sinking, lease payments etc.

Interest Coverage is another ratio similar to debt coverage ratio above. The ratio is calculated by dividing a company’s earnings before interest and taxes (EBIT) by the company’s interest expenses for the same period. 

Per WSJ, as of 09/11/2020, ENIA’s Interest Coverage is 3.29. PASSED.

https://www.wsj.com/market-data/quotes/ENIA/financials

Criterion #5: Management Performance 

Read company reports as well as analyst reports. Understand its management team. Know the company’s long term growth and expansion plans.    

ENIA: Recent quarterly call transcripts:

https://seekingalpha.com/symbol/ENIA/earnings/transcripts

Criterion #6:    Current Dividend Yield

It should be at least 4% or 5%. ENIA: 12.51% (Paid Semiannually)

Criterion #7: Dividend Growth Rate

It should be at least 5%. Check out dividend.com and know the company’s dividend policy. ENIA: 5 years: 4.60%

Criterion #8: Dividend Payout Ratio

It should be less than 60% (check out dividend.com). Otherwise it cannot fund its growth.

Payout ratio of 60%-70% is acceptable only if its dividend yield is compelling (8-10%). Considering selling it if its payout ratio is too high.

ENIA Dividend Payout Ratio:

59.77%, PASSED (Based on Cash Flow, https://www.marketbeat.com/stocks/NYSE/ENIA/dividend/)

But other sites are showing different numbers:

122.43% (FWD PAYOUT RATIO, https://www.dividend.com/dividend-stocks/utilities/electric-utilities/enia-enersis-americashttps://www.marketbeat.com/stocks/NYSE/ENIA/dividend/-sa/#tm=3-ticker-best-div-capture&r=ES%3A%3ADividendStock%3A%3AStock%23ENIA–NYSE&f_28=true&only=meta%2Cdata%2Cthead)

114.03% – FAIL ??? (https://seekingalpha.com/symbol/ENIA/dividends/dividend-safety)

Criterion #9: ROE

ROE for the last 3 or more years is 12% or higher.

TTM ROE is at least 15%. Use financial data from morningstar/Key Ratios/Profitability.

During the past 13 years, Enel Americas/ENIA’s highest ROE % was 19.87%. The lowest was 7.46%. And the median was 11.22%. (https://www.gurufocus.com/term/ROE/NYSE:ENIA/ROE–ttm/Enel-Americas)

Enel Americas/ENIA’s return on equity, or ROE TTM, is 11.16% , as of 9/11/2020 (https://www.zacks.com/stock/chart/ENIA/fundamental/return-on-equity-ttm).

Criterion #10: Insider Activity

Buy when insiders are holding or buying more shares. Data can be extracted from:

a. Morningstar/Insiders/Insider Activity

b. Yahoo Finance/Insider Transactions

c. Zacks.com/More Research/Insiders

ENIA: No inside activities for the last 6 months: https://in.finance.yahoo.com/quote/ENIA/insider-transactions/

Criterion #11: Intrinsic value

Buy at or below its instrinsic value because your performance is determined not only by dividends but also capital appreciation.

ENIA: $10.66, current price $7.21 USD as of 09/11/2020. PASSED.

as of

12/31/2019

10.658