Investors who want to cash in on NGL Energy Partners LP’s (NYSE:NGL) upcoming dividend of $0.39 per share have only 3 days left to buy the shares before its ex-dividend date, 05 February 2018, in time for dividends payable on the 14 February 2018. 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 NGL Energy Partners’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for NGL Energy Partners
5 checks you should use to assess a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it the top 25% annual dividend yield payer?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share risen in the past couple of years?
- Is is able to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does NGL Energy Partners fit our criteria?
NGL Energy Partners has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view NGL Energy Partners as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, NGL Energy Partners generates a yield of 9.43%, which is high for Oil and Gas stocks.
After digging a little deeper into NGL Energy Partners’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. 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 essential aspects you should look at:
- 1. Future Outlook: What are well-informed industry analysts predicting for NGL’s future growth? Take a look at our free research report of analyst consensus for NGL’s outlook.
- 2. Historical Performance: What has NGL’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- 3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.