Key Takeaways:
- $HASI currently offers a 6.9% dividend yield today.
- Management has released long-term guidance that EPS will grow about 8-10% annually over the next 3 years.
- Analysts think the stock has nearly 60% upside today.
- Get accurate financial data on over 100,000 global stocks for free on TIKR >>>
Hannon Armstrong Sustainable Infrastructure Capital (HASI) is investing in clean energy and infrastructure projects and currently offers a nearly 7% dividend yield.
Analysts think the stock is very undervalued today, and the business is expected to meaningfully grow earnings in the coming years.
This stock isn’t without risk, but for investors seeking dividend income with upside potential, HASI might deserve a spot on your watchlist.
Why Has $HASI Stock Dropped?
Rising interest rates and general market uncertainty are largely to blame for the recent decline in HASI’s stock price.
HASI depends on long-term funding and steady cash flow because it invests in clean energy infrastructure projects. Rising interest rates raise financing costs.
As a result, the stock has declined, which makes the dividend yield all the more alluring today.
Analysts Think HASI Has 60% Upside Today
Analysts think the stock has nearly 60% upside today due to the long-term growth potential for the US power market.
On top of that, investors are paid to wait with the company’s nearly 7% dividend yield.
It’s worth noting that the business is growing, and this stock isn’t just a value trap.
1: Dividend Yield
HASI currently offers investors around a 6.9% dividend yield.
This is much higher than the stock’s 5-year average yield of 4.5%.
This dividend is fueled by the company’s strong cash flow generation from its portfolio.
Find high-yield dividend stocks that are even better than HASI today. (It’s free) >>>
2: Dividend Safety
Today, $HASI has about a 68% dividend payout ratio, which means that about two-thirds of the company’s earnings are paid out as dividends.
We like to see dividend-paying stocks with a payout ratio below 70%.
Even though this is right on our threshold, $HASI still looks like a very interesting dividend stock because earnings are expected to grow much faster than dividend growth in the coming years, which means that HASI will pay out a smaller portion of its earnings as dividends over time.
See $HASI’s full growth forecast. (It’s free) >>>
3: Dividend Growth Potential
HASI has given long-term guidance that earnings-per-share will grow about 8-10% annually through 2027.
This is huge because EPS growth is one of the biggest drivers of dividend growth. When a company earns more, it can pay out more in dividends.
Analysts expect dividends to grow in the low-single-digits over the next few years. With the stock already offering a nearly 7% dividend yield, this is really just icing on the cake.
Additionally, if the company retains more of its earnings, as it’s expected to, it will be able to reinvest more capital and drive accelerated earnings growth in the future.
TIKR Takeaway
With a high yield, strong tailwinds from clean energy, and a more sustainable balance sheet than some might think, HASI could be an interesting pick for income-focused investors who can handle a little volatility.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
