Icahn Enterprises LP (NASDAQ:IEP) is a holding company that has investments in a wide range of segments, including automotive, mining, real estate, and many others. Currently the stock pays a remarkable dividend of over 11.5% with quarterly payments of $1.50 per share. In its last four quarters the company’s earnings per share has totalled $8.42 and would mean the company’s 71% payout is very sustainable if Icahn can continue its strong performance.
The company doesn’t have a long history and has only been traded since 2013 but a short history doesn’t mean dividends are in doubt, especially if a company is growing and its payout is low. In its most recent quarter Icahn saw a year-over-year growth of 4.6% and for the first half of the year sales are up over 12%.
In total dollars the amount of the company’s dividend payment in the last fiscal year was just $103 million, compared with cash flow from operations of $1.5 billion. In the near term it certainly looks as though the dividend is fairly safe.
Year-to-date the stock has declined by over 13% and that has helped push the yield up. The share price currently trades at a multiple of six times its earnings and about twice its book value. The share price does not look expensive but with a large gain in its most recent quarter earnings per share is also higher than it normally would have been. However, in the past three months the stock has appreciated over 8% and found some stability, so it may still be a good time to buy this stock and lock-in the great dividend.