In today’s article, we have picked two energy companies, ENI S.p.A. (IT:ENI) and Enel S.p.A. (IT:ENEL), that are listed on the Borsa Italiana. Both of these stocks possess all the necessary elements to be considered promising investment opportunities and have been rated as Strong Buy.
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ENI exhibits the potential for almost a 30% increase in its share price, whereas Enel presents a growth opportunity of 18%. Moreover, these stocks also carry attractive dividend yields, checking the box for income investors.
Let’s take a look at the details.
ENI S.p.A.
Eni is an energy company engaged in the exploration, discovery, development, and production of crude oil, natural gas, and condensates.
The company’s stock remains a strong pick among investors in 2023. Following a year of achieving record profits, this company is positioned to surpass market expectations due to a combination of effective management decisions, favorable market conditions resulting from recent OPEC+ agreements, and advantageous positioning within the oil market.
Speaking of dividends, the company announced the distribution of 25-30% of cash flow through dividends and share buybacks. For 2023, Eni has announced that its dividend will increase by 7% to €0.94 per share.
Is Eni SpA a Good Buy?
According to TipRanks, ENI stock has a Strong Buy rating based on ten Buy and three Hold recommendations.
The average price forecast is €16.65, which has an upside of 30% on the current price level.
Enel S.p.A.
Based in Italy, Enel is a global company engaged in the production and distribution of electricity and gas.
Analysts are bullish on the stock considering the company’s progress on its debt-reduction strategy. As part of this, the company recently sold its assets in Romania and Peru. The company is also assessing the feasibility of implementing a fresh share buyback program.
Enel has a dividend yield of 6.38%, above the sector average of 2.9%. In 2022, the company paid a dividend of €0.38 per share. According to its strategic plan for the next two years, the company is targeting a dividend of €0.43 per share in 2023, €0.43 per share in 2024, and €0.43 per share in 2025.
Two days ago, analyst Fernando Garcia from RBC Capital reiterated his Buy rating on the stock, predicting an upside of 24% in the share price.
What is the Price Forecast for Enel?
ENEL stock has a Strong Buy rating on TipRanks backed by all nine Buy recommendations. The average price target is €7.2, which is 19.3% higher than the current trading level.
Conclusion
ENI and ENEL present an attractive investment opportunity, appealing not only to value investors but also to dividend-oriented investors seeking stable returns.
Both stocks have Strong Buy ratings on TipRanks.
