Should you buy Kenon Holdings (KEN) now for its 50% dividend yield and CPV stake expansion?

**The high dividend yield and CPV stake expansion of Kenon Holdings (KEN) are attractive features, but they should be evaluated in the context of the company's overall financial health and market conditions.** Here's an analysis to help you make an informed decision:

1. **Dividend Yield Analysis**:
- The dividend yield for Kenon Holdings is exceptionally high at 11.19% as of July 1, 2025. This is a significant attraction for income-focused investors.
- However, high dividend yields can sometimes indicate a higher risk of default or lower growth prospects, as companies may need to offer higher dividends to attract investors.

|code|Ticker|Name|Date|Payout Ratio|Dividend Yield (TTM)|market_code|
|---|---|---|---|---|---|---|
|KEN|KEN.N|Kenon Holdings|20240702|-12.109022757888567|15.866388308977037|169|
|KEN|KEN.N|Kenon Holdings|20240703|-12.109022757888567|15.806922600155573|169|
|KEN|KEN.N|Kenon Holdings|20240704|-12.109022757888567||169|
|KEN|KEN.N|Kenon Holdings|20240705|-12.109022757888567|14.907806983130639|169|
|KEN|KEN.N|Kenon Holdings|20240706|-12.109022757888567||169|
|KEN|KEN.N|Kenon Holdings|20240707|-12.109022757888567||169|
|KEN|KEN.N|Kenon Holdings|20240708|-12.109022757888567|14.907806983130639|169|
|KEN|KEN.N|Kenon Holdings|20240709|-12.109022757888567|15.055467511885896|169|
|KEN|KEN.N|Kenon Holdings|20240710|-12.109022757888567|14.80904130943102|169|
|KEN|KEN.N|Kenon Holdings|20240711|-12.109022757888567|14.564967420467612|169|

2. **Dividend Sustainability**:
- Kenon Holdings has a payout ratio of 0%, which suggests that the company is retaining all its earnings and not distributing them as dividends. This is a positive sign for the sustainability of its dividend payments.
- The company has free cash flow of $49 million, which provides a strong capacity to continue paying dividends.

|code|Ticker|Name|Date|Free Cash Flow|Payout Ratio|market_code|
|---|---|---|---|---|---|---|
|KEN|KEN.N|Kenon Holdings|20240401||-20.999594730127804|169|
|KEN|KEN.N|Kenon Holdings|20240402||-20.999594730127804|169|
|KEN|KEN.N|Kenon Holdings|20240403||-20.999594730127804|169|
|KEN|KEN.N|Kenon Holdings|20240404||-20.999594730127804|169|
|KEN|KEN.N|Kenon Holdings|20240405||-20.999594730127804|169|
|KEN|KEN.N|Kenon Holdings|20240406||-20.999594730127804|169|
|KEN|KEN.N|Kenon Holdings|20240407||-20.999594730127804|169|
|KEN|KEN.N|Kenon Holdings|20240408||-20.999594730127804|169|
|KEN|KEN.N|Kenon Holdings|20240409||-20.999594730127804|169|
|KEN|KEN.N|Kenon Holdings|20240410||-20.999594730127804|169|

|code|Ticker|Name|Dividend Growth Duration|Dividend Continuous Duration|market_code|
|---|---|---|---|---|---|
|KEN|KEN.N|Kenon Holdings|1|4|169|

3. **Financial Health Indicators**:
- Kenon Holdings has a ROE of 0.75%, which is relatively low and may indicate inefficiencies in generating returns from its equity capital.
- The debt-to-equity ratio is 0.47%, which is low and suggests a conservative capital structure.

|code|Ticker|Name|Date|Debt-to-Equity Ratio|ROE(Average)|market_code|
|---|---|---|---|---|---|---|
|KEN|KEN.N|Kenon Holdings|2024 Q2|0.7383603238866396|10.4296|169|
|KEN|KEN.N|Kenon Holdings|2024 Q3|0.6891701828410689|13.7709|169|
|KEN|KEN.N|Kenon Holdings|2024 Q4|0.4768710041368936|42.5206|169|
|KEN|KEN.N|Kenon Holdings|2025 Q1|0.4689732982324182|0.7477|169|

|code|Ticker|Name|Date|Free Cash Flow|Free Cash Flow YoY|market_code|
|---|---|---|---|---|---|---|
|KEN|KEN.N|Kenon Holdings|2024 Q2|8.4016E7|136.6300446151816|169|
|KEN|KEN.N|Kenon Holdings|2024 Q3|-4.2994676E7|72.10623148175877|169|
|KEN|KEN.N|Kenon Holdings|2024 Q4|1.08463898232E8|137.40134352484546|169|
|KEN|KEN.N|Kenon Holdings|2025 Q1|-9.5475E8||169|

4. **Market Position and Growth Prospects**:
- Kenon Holdings operates in the energy sector, with a focus on power generation. The energy sector can offer stable cash flows but may also be subject to regulatory changes and market volatility.
- The company's recent updates include the enhancement of its stake in power plants through CPV Group, which could be a positive sign for its growth prospects within the energy sector.
5. **Dividend History and Future Prospects**:
- Kenon Holdings has a history of dividend distributions, with a recent cash dividend of approximately $250 million in April 2025.
- The company's dividend continuous duration is 1 year, and it has been growing, which is a positive indicator for its commitment to returning value to shareholders.

In conclusion, while the high dividend yield is certainly appealing, investors should also consider the company's financial health, market position, and growth prospects. The low ROE and the company's focus on energy generation are important factors to weigh against the benefits of the high dividend yield. It's also crucial to monitor any changes in the company's financial performance and market conditions that could impact the sustainability of the dividend. Based on the available data, if you are primarily focused on income and are comfortable with the company's financial health and sector risks, Kenon Holdings could be a viable option. However, it's always advisable to conduct a comprehensive analysis and consider your own risk tolerance before making investment decisions.