2 Days Left To Cash In On Equinor ASA (OB:EQNR) Dividend
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Investors who want to cash in on Equinor ASA's (OB:EQNR) upcoming dividend of US$0.26 per share have only 2 days left to buy the shares before its ex-dividend date, 16 May 2019, in time for dividends payable on the 29 May 2019. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let's take a look at Equinor's most recent financial data to examine its dividend characteristics in more detail.
Check out our latest analysis for Equinor
Here's how I find good dividend stocks
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Does it pay an annual yield higher than 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has the amount of dividend per share grown over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
How well does Equinor fit our criteria?
The company currently pays out 41% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect EQNR's payout to increase to 51% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 5.2%. However, EPS is forecasted to fall to $1.94 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. Dividend payments from Equinor have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
Relative to peers, Equinor produces a yield of 5.0%, which is on the low-side for Oil and Gas stocks.
Next Steps:
Whilst there are few things you may like about Equinor from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. Below, I've compiled three fundamental factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for EQNR’s future growth? Take a look at our free research report of analyst consensus for EQNR’s outlook.
Valuation: What is EQNR worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether EQNR is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
